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The vertical line is known as the y axis. It is nothing more than a measuring stick to count how far up or down a point is from the horizontal line. The horizontal line, then, is known as the x axis and measures the distance left or right from the vertical line.
(SSP) The coordinate system used in Minecraft is a little confusing, as it doesn't really correlate to what is generally used. Usually, the X and Y axes are used when talking about length and width, and the Z is used for height. However, in Minecraft, the X and Z axes represent length and width, and Y represents height. As X or Z increase or decease, you are moving farther away from 0, 0, or the center of your Minecraft world.