What does this code do?

$1 and $2 are variables that hold the captured information in the
regular expression on the previous line:
mail.encoded =~ /user\[identifier\]=(.*?)&key=(.*?)"/
Translation:
All the characters between user[identifier]= and the first occurrence
of &key= are captured into $1, and all the characters after &key=
until the first occurrence of " are captured into $2. If that barely
made sense to you, I'd recommend reading a regular expression tutorial
(like on regular-expressions.info). You will likely use them often if
you plan to do any significant amount of parsing in just about any
language (esp. Ruby, Perl, Python, JavaScript, PHP, and so on).

HTH,
Matt