JenC, there are others here who know much more about this than me, but I will give my take on what they mean. Others will correct me where necessary I'm sure.
Airlines sell tickets in a fashion that maximises their revenue. I believe this is termed "Yield Management"
The differences you may find in purchasing tickets in different booking classes include class of travel (eg. First, Business, Economy), restrictions on tickets (eg. refunds, re-routing, cancellations etc.), and earning for Frequent Flyer programs (miles/points, program status credits etc.). There can be (and are) multiple booking classes within each travel class.
Generally speaking, the "higher" the booking class, the better the travel class, fewer restrictions, and better earning. Generally, the booking class is denoted by a letter (can also be a number), but is not in any alphabetical order. I have pinched the list below from Dave Noble's post in the QF WP -compiled Ultimate Qantas Guide from the QF Board over at flyertalk.com.
For domestic Qantas, the booking class equates to the ticket type you see on QF's booking section on the website. eg. O and N classes are "Red-E deals" - being the cheapest fare types they have the most restrictions, and are in economy class. J class is full fare business class and has fewest restrictions and is flown in business class (and is the most expensive domestic fare).
Hope that wasn't too long-winded (and hope it was essentially correct)!
I DISCOUNT BUSINESS
T ECONOMY - Award
U Business - Award
X Economy - Award
Z First - Award
You know, Lindsay Wilson, I thought it was available here, but "senior mode" overtook me (which is a worry at my age, no spring chicken, but hardly pensionable) and I looked just about everywhere for it except the logical place - the "Qantas Frequent Flyer" board in this forum!!