what does the index '1' in the following code segment represent ?

Sheet2=Sheets.Item(1);

and the number index have how many valid values?

[Rik]

How should we know? You provide no context at all. Have a read here (or here for more general advice). It will greatly improve your chances of getting an answer.

You may also benefit from a Matlab tutorial that will teach you the basics. You can find one of the many here.