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 or miss your target in combat.
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In the new D&D system, ThAC0 has been replaced by a new, "less complicated system".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).