What is the unit of measure with the ruler tool? When I use the ruler tool, it gives a very accurate reading, with many numbers past the decimal point.

However, what am I reading?  Is it giving me this in meters, centimeters, inches?  And is there a way to specify this in preferences somewhere?
By default it uses blender units (BU), which are equivalent to meters. You can specify imperial or metric units in Properties > Scene > Units:




Also see:


Blender units vs metric
How do blender units and meters, feet, or yards correlate? 
What is a sensible scale to work with?