A checksum is a way to verify the contents of a message. Basically, a checksum value is transmitted with the message, and you can calculate the checksum yourself when you receive the message. If the transmitted checksum and the calculated checksum don't match, there is an error in the message you received.
TLE data uses a very simple checksum algorithm - basically the sum of all the digits in the line mod 10, with minus signs counting as 1, letters and whitespace as 0, Here's the python code I use for calculating the TLE checksum:
def checksum(line):
L = string.strip(line)
cksum = 0
for i in range(68):
c = L[i]
if c == ' ' or c == '.' or c == '+' or c in string.letters:
continue
elif c == '-':
cksum = cksum + 1
else:
cksum = cksum + string.atoi(c)
cksum %= 10
return cksum
Here's some more info on checksums in general:
http://en.wikipedia.org/wiki/Checksum