I never exactly figured out what the issue is, and this might just be coincidence, but I recently upgraded to Lion (and installed Messages Beta over iChat) and have not seen this issue since. I'm going to tentatively say this is resolved...
RSSI or Received signal strength indication is what is used for the display of the bars.
The higher the number ( closer to 0 ) the better your signal strength.
For Apple devices they used a scale of -100 to 0. But you'll never see 0, or even close. Most people will see a number between about -50 and -80, with around -50 being excellent.
-50 will show all the bars and -90 will show gray bars. Not sure if it will go to -100 since you don't have a signal then ;)
So if you're asking for a scale I think its around 10 to 12.5 RSSI per bar.
While you have a good signal strength, your throughput speed ( Tx Rate ) isn't that fast.
One method to calculate signal quality is to compute the Signal-to-Noise Ratio (SNR). SNR is the signal level (in dBm) minus the noise level (in dBm). Both of these values are typically represented as negative numbers. For example, a signal level of -53dBm and a noise value of -90dBm would yield an SNR of 37dB (i.e., SNR = Signal - Noise = -53 -(-90) = 37)
The calculated SNR value, as measured from a wireless client, would decrease as the range to the base station increases due to applicable free space loss. Also an increase in RF intereference from microwave ovens, cordless phones, walls, ceilings, etc, which would increase the noise level, would also decrease the overall SNR value.
SNR Guideline
40+dB = Excellent signal
25dB to 40dB = Very good signal
15dB to 25dB = Low signal
10dB to 15dB = Very low signal
5dB to 10dB = Little or no signal
In your case -65 - -90 = 25 or -70 - -85 = 15
So you have a 15db to 25db signal OR as diagnostics calls it SNR which isn't that good but isn't really bad either.
Best Answer
“Current Channel” means “Number of Networks Using the Current Channel”. Your current channel is channel 2. Your computer found 1 network that uses channel 2.
This is made more clear in the wireless_diagnostics log created by Wireless Diagnostics. There is a section that looks similar to this:
edit: I do not have enough reputation to comment on or downvote the other respondent's answer, but it is incorrect.