The number you quote is a measurement of Specific Gravity, in other words, how much sugar is in the water (there's no way 1.10 is right, by the way, but that's another story). Basically, the more sugar there is, the higher your hydrometer floats, so the higher the reading. In water, it will read 1.000.
Theoretically, the more sugar there is at the start, the stronger the resulting brew will be; fruit juices will ferment down to below 1.000. Grains, however, contain some non-fermentable sugars, so your final brew still has sweetness, and your final gravity is higher. In the case of your beer kit, it's probably 1.010 (1.100 is like the starting gravity for a wine!). The more malt you put in a brew (to make it stronger) the more non-fermentable sugar will be left, so stronger beers are generally sweeter, but balanced with hop bitterness. Some grain types give lots more non-fermentables, which add flavour.
To calculate ABV, you need the starting gravity, and the predicted final gravity, you put those into the calculator on this site, and it will give you an ABV. The proof of the pudding is the REAL SG and FG figures as measured on your hydrometer; these will tell you what the actual ABV is, and it may be a smidgen different than predicted. Don't get too hung up if it comes out at 4.3 instead of 4.5 %.
Hope this helps!
