You can see that this call to CreateWindowEx() specifies quite a few styles, and it's not uncommon to have many more, especially for the Common Controls which have a hearty list of options. The first 4 WS_ styles should be fairly obvious, we are creating the control as a child of our window, we want it to be visible, and have vertical and horizontal scroll bars.
The 3 styles that are specific to EDIT controls (ES_MULTILINE | ES_AUTOVSCROLL | ES_AUTOHSCROLL) specify that the EDIT control should contain multiple lines of text, and scroll automatically as you type beyond the bottom and right hand side of the control respectively.
The regular window styles (WS_*) are listed here. And the extended windows styles (WS_EX_*) are explained under the CreateWindowEx() reference in MSDN, where you can also find links to the styles that are specific to each control (ES_* in our case of the edit control).
We have specified our window handle as the parent of the control, and assigned it an ID of IDC_MAIN_EDIT which we'll use later on to refer to the control just as you would if the control had been created on a dialog. The position and size parameters don't mean too much at the moment since we will be resizing the control dynamically in the WM_SIZE message so that it will always fit our window.