l indicates that the object is a symbolic link. This is simply a pointer to some other object, which may or may not exist. Attempts to access the link will result in the object being pointed to being accessed instead. The object could be anything: a file, directory or special file will all work.
For example, in your root directory you may well have this:
lrwxrwxrwx 1 root root 27 Sep 12 2012 /vmlinuz -> boot/vmlinuz-2.6.32-5-amd64
This means that, when
/vmlinuz is accessed, the file being pointed to is read instead. If that file doesn't exist, the operation will fail.
To create a symbolic link, use the command
ln -s source-file link-file
This will create a link that looks like
link-file -> source-file
Note that this is distinct from a hard link, created by omitting the
-s option. A hard link creates a filesystem pointer to the same inode as that used by the source object, and can't point to an object on a different filesystem.