I believe keepalive refers to an HTTP connection state. After requesting the initial page, I think most browsers keep the HTTP connection in the 'keepalive' state to fetch resources referenced from the page, e.g. images and stylesheets. This reduces the overhead of having to create new HTTP connections for each item on a page.
From the AOLServer configuration reference:
Maximum number of connections which can use HTTP keep-alive; should be equal to MaxConnections
I've followed this suggestion, and nothing bad has happened to me so far!
