Originally Posted by razorsoup
For tools/armor/weapons the damage value is how many uses that item has until it breaks. For some items like wool the damage value will control which version of that item you have.
Wiki page which explains the data values for various blocks. Data values - Minecraft Wiki
Okay, correction time. For tools, weapons, and armor, the damage value is how much damage the item has taken, not how much the item has left. For a new tool, this starts at zero and counts up. So setting the damage value higher on a item with durability will actually make the item break faster.
On the plus side, the damage value seems to actually be a signed short and not unsigned as this editor uses. In order to get the most uses out of an item, you need to set the damage value to 32768 (which ends up being hex 8000). Minecraft will interpret this value as -32768 giving your item over 30000 uses.