There are many different formulas for Runs created, but the most basic one is:
For whole teams, Runs created turns out to correlate fairly well with the number of runs a team actually scores, though there are more complex versions of the formula which are even more accurate. This correlation is the justification of the use of OPS as a useful (and simple) player evaluation metric.
Runs created in its basic form takes into account for level of production and amount of playing time. It is sometimes expressed as a rate stat, to consider only level of production, and is usually expressed as Runs created per some number of outs, e.g. RC/25 or RC/27 (27 of course being the number of outs per team in a standard 9-inning baseball game).
See also Sabermetrics.