background: is shorthand for things like background-color, background-attachment etc. So each one one those properties refers to one of those. See the Reference for more details: http://reference.sitepoint.com/css/background
"none" often means no background-color, but there is a bg color there, so in this case it refers to no bg image.
"repeat" is for background-repeat
"scroll" is for background-attachment
"0 0" is for background-position, but is kind of irrelevant here, as there is no bg image to be positioned, as are the previous ones.
Of course #E5E5E5 is background-color.
"How does the line background: none repeat scroll 0 0 #E5E5E5; influence design"
It sets the background properties for the element it applies to.
Most of it is useless, though, because there is no background image. It would be better, in this case, just to write: