The equation $$x' = x - vt$$ describes how the position of an object changes when viewed from two different inertial reference frames, where 'x' is the position in the moving frame, 'x' is the position in the stationary frame, 'v' is the relative velocity between the frames, and 't' is the time elapsed. This transformation highlights how measurements of space and time can vary between observers in different states of motion, emphasizing the concept of relative motion and laying the foundation for classical mechanics.