Notice that there are numbers located smack dab in the middle of the lines (aka strings). The numbers simply represent the fret the tab is telling you to play. For example, in the illustration above, the tab is telling you to play the third string (third line) seventh fret.
Note: When the number "0" is used in tablature, this indicates that the open string should be played.
This is the concept of reading tab, at its most basic. Now let's examine some of the more advanced elements of reading tablature notation, including how to read chords in tab.