ThAC0 was based against the Dungeons and Dragons Armor Class system. Your ThAC0 roll was what you would need to roll (or higher) on a 1d20 to determine whether you would hit them.

Now natural ThAC0 is usually 20. Natural, standing, unimpeded, unhandicapped Armor Class is 20.

The formula for figuring out the ThAC0 was:

ThAC0 - armor class = Number to roll above on a 1d20.
20 (natural ThAC0) - 10 (natural AC) = 10 or above to hit

That would mean that any 1st level character would have a dead on 50/50 chance of hitting another character. Lower Armor Class is better. Thus an AC of -10 (very powerful creatures) would require a 30 or above on a d20, for a lv 1 character.

In the new D&D system, ThAC0 has been replaced by a new, "less complicated system". I'll miss the days of the ThAC0 charts. (ThAC0 charts for high level characters are available as an expansion for AD&D in the High-Level Campaigning add-on).