tvfreakazoid,
If you have any questions about how the mechanical parts of cars work, check out
HowStuffWorks - Learn How Everything Works!
That will answer just about everything you need to know. The direct link to the gearing section is
HowStuffWorks "How Gear Ratios Work"
Once you read that then read my following comment.
Close ratio gears just means that there is less of a difference between the size of the gears (gear ratios). The result is that gears are shorter and that translates to faster acceleration. There are two problems when gears ratios are too close. 1) You limit your top speed and 2) You have to shift more often and therefore any time you gained in acceleration is nulled out by the time it takes you to do all that shifting. The opposite occurs when the ratios are longer... you will have less acceleration, but a higher top speed.