Altitude is the elevation of ground.
In Second Life, there is no negative altitude. Everything starts from zero level. Usually, water altitude is set at 20 meters, but there are exceptions. Usually, building is allowed up to 4096 meters, but in some places this is limited (like in Premium Continents). Flying is usually allowed up to a bit above 5000 meters. Ground elevation seems to affect flying limit, increasing it.
altitude maps reveal interesting and unexpected features for a Geographic area. Many Microsectors inside large continents are scanned to reveal their altitude maps.