Velocity is the value that says how hard a MIDI note was played. Most MIDI gear handles it in a range of 1 to 127. Higher generally means louder, but depending on the instrument it can change brightness, attack and which sample is played, not just level.
Not just level
Piano and drum instruments often switch to a brighter tone or a different recorded sample the harder you play. That is why raising a fader and raising velocity are not the same thing. Treat velocity as information that shapes the expression of a performance.
Editing in the piano roll
Dragging the bars shown at the bottom of the piano roll changes the velocity of each note. Setting them all to the same value gives an even result, while small differences make it easier to sound like a human played it. Too much randomness produces accents you did not intend.
Using it on drums
Making the snare backbeat strong and giving the hi-hat fine dynamic variation puts movement into the rhythm. Setting every note to the maximum can be too strong and tiring depending on the instrument. Decide by comparing with the other instruments in the song.
Relationship to quantize
Quantize adjusts timing; velocity adjusts strength. Flattening velocity after tightening timing can make a part sound heavily programmed. Leave accents in on purpose when you need them.
Checking your work
Rather than looking at notes one by one, play back the whole phrase and listen. The basics of MIDI are covered in the DAW article.
