You're basically putting the multimeter in series with your power supply while measuring the current (Amps) that's "flowing" through it.
Just to be clear on some terminology: 1Ah = 1 Amp-hour = 1000 mAh = 1000 milliamp-hours, which is a measurement of battery capacity (well, sorta). Amperes (or just "Amps") is a measurement of current. Like hailrazer said, if you know how long your battery lasts (hours) and what your current draw is (Amps) then you can figure out your battery capacity (Amp-hours or milliamp-hours). Similarly, if you know your battery's capacity in (Ah or mAh, typically it's mAh) you can divide that by your system's current draw (A or mA) to calculate about how many hours your system should last in ideal conditions.
I don't mean to be patronizing, just clarifying for anyone else teaching themselves electronics by reading these forums, which a lot of people do.