From the AdWords site…
With the AdWords site tool, you can pick your preferences in up to three different demographic categories. The system will analyze your preferences and create a list of available Google Network sites that are popular with that audience. If you select multiple demographics, the AdWords system will look for sites that match all of your preferences. For instance, you might ask the site tool to look for sites popular with users who have children, or for sites popular with men earning a high income. The site tool will then return a list of sites whose audience tends to match those demographic descriptions.
Google is getting the data from comScore Media Metrix and is currently only available for targeting the U.S.
Thanks to Tim Seward for the tip.