I am not a modder or programmer, I hear talk about mod API a lot, and I know its something to make it easier for modders, I know its hard right now or time consuming at least due to obfuscation, whatever that is.
Application Programming Interface.
Makes mods easy, basically. We can't tell you how it works or what it means since it hasn't been released yet. It could be anything from allowing people to install mods straight from the game menu to a screen that allows you to select mods like texture packs.
Edit: Looking over the post on the front page, it could even be something like a website owned by Mojang that allows you to download mods, like Bukkit.