This question How do you include additional files using VS2010 web deployment packages? doesn't directly address your question but the most popular answer has loads of useful information and provides a clue as to what the % sign means.
<_CustomFiles Include="..\Extra Files\**\*" />
<FilesForPackagingFromProject  Include="%(_CustomFiles.Identity)">
I think the _CustomFiles tag creates a link to an external file, then %(_CustomFiles.Identity) refers to an element within that external file.
UPDATE:
NO! This is not right. The % expression gives a scalar value. The _CustomFiles is an Item and the .Identity part of the syntax refers to well-known metadata as explained by Marcos in the accepted answer.