The clock represents the threat of nuclear annihilation. It was conceived by the board of directors of Bulletin of the Atomic Scientists and it first appeared on the magazine in 1947 – two years after the United States had used two nuclear weapons against Japan. The atomic scientists developed the idea in order to illustrate the threat of total destruction posed by nuclear weapons. On the clock, midnight (12:00) is the time of destruction. When the clock first appeared, the scientists had set the time at seven minutes before midnight. In the decades since, the clock has been adjusted based on the proliferation of nuclear weapons or the agreements to limit them.
The closest it ever came to ‘doomsday’ was two minutes until midnight. This was in 1953; shortly after the United States and Soviet Union each tested hydrogen bombs. The farthest the minutes hand has ever been from striking the hour of midnight was in 1991 when the United States and Soviet Union announced cuts in nuclear weapons. The scientists moved the clock to read 17 minutes until midnight.
In the late 1990s, the clock read 14 minutes to midnight, but the 1998 testing of nuclear weapons in Pakistan and India, neighboring countries long at odds with each other, resulted in the clock being forwarded by five minutes – to just nine minutes before midnight.
Today, the looming environmental disasters like runaway greenhouse effect are also taken into account to indicate how close the mankind is to its doomsday. At present, the clock shows five minutes to midnight.
Related update (January 2012):
Doomsday Clock Brings Us One Minute Closer To The Apocalypse
Doomsday Clock (Wikipedia)