The body fat & body density calculator takes skinfold measurements that you obtained with a caliper and plugs them into an equation that tells you what your body fat percentage is.
Unless you are specifically looking for your body density, it doesn't mean too much. Body fat is derived from body density and measuring skin folds gives you your density. The density is thenplugged into an equation which converts it to your body fat percentage.
There is more than 1 method (or equation) to derive your body fat percentage. Both methods will give you a similar percentage.
For more accurate results, take your body fat at the same time each day and get the same person to do it everyday. The degree of error depends on many factors including the time of day (don't measure it right after exercise) and the person who takes the measurements.