From Matthew Wright,
Your Guide to Auto Repair.
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The Plus concept was developed by performance-minded car owners and tuners who wanted to be able to put wider, bigger wheels and tires on their cars without sacrificing speedometer accuracy.

The Problem
Your car's speedometer is calibrated by telling the needle you see on the dashboard how many times the wheel spins around. The problem is, if you make your wheel diameter smaller, it's going to spin more times to go the same number of miles. Your car doesn't know you monkeyed around with your tire and wheel size, so it will give you an inaccurate reading.

The Solution
In order to keep your speedometer accuracy, you need to change your tires and wheels in such a way that the overall diameter of the setup does not change significantly. For instance, a 225/60-16 has the same rolling diameter as a 245/50-17. The larger tire will give better traction and cornering because it is wider and has a lower aspect ratio, but won't throw off the speedo.

The Plus One
The Plus concept takes it a step further, and formulates the tire size you'll need if you increase your wheel diameter by an inch, for instance changing from a 15-inch to a 16-inch wheel and tire. As the wheel diameter goes up, the aspect ratio goes down to compensate for the changes. There are also formulas for Plus Two, Plus Three and so on depending on how big you want to go.

You can even do a Plus Two or Plus Three, as long as you keep the dimensions under control. For a cool way to see the difference your tire size choices make, and to calculate what your options are, check out this Plus Sizing Conversion Calculator from the able minds at Miata.net.