To try to be a little more concise in Ray's explanation, the axle ratio is the ratio between the number of revolutions the driveshaft makes in relationship to revolutions the tires make. If you have the 3.42 ratio, your driveshaft will turn 3.42 times to make the tire turn once.
The pros for the lower numerical ratio is that you'll get better gas mileage, your engine won't be turning as fast to keep your car at the same speed. That's pretty much the major advantage. Disadvantage is that you will not accelerate as fast and you won't be able to tow as heavy loads as if you had a higher ratio.
The advantages of the higher numerical ratio (4.10's) is that you'll get a higher towing capacity and faster acceleration. The down side is that your gas mileage will suffer.
The reason I said numerical ratio is because a higher numerical ratio is different from a taller gearing. A taller gearing means a smaller numerical ratio. 3.42's are a taller gear and a lower numerical ratio while 4.10's are a shorter gear and a numerically higher ratio.
There are other advantages and disadvantages but most of them are insignificant in relationship to gas mileage and acceleration when talking about axle ratios.
The ratios are based on simple division. 4.10 gears are 41 teeth on the ring gear and 10 teeth on the pinion. The pinion gear is driven by the driveshaft and the ring gear is attached to the differential which drives your axles and in turn turn your tires. 3.73's have 41 and 11 respectively and 3.42's have 41 and 12. Divide the first number by the second and you have your gear ratio.
If you're a visual learner, go here:
http://auto.howstuffworks.com/gear-ratio.htm
-Bruce