Yeah, I thought the term "Activity Level" kinda boring. I enjoy that RAF was able to personalize it to fit the site's inside jokes.
As Steph said, the meter is based on a 30 day period, where 500 is the target number.
So if you post 250 posts on May 1st, then accrue 250 posts up to May 28th, on that day you'll be 100% active/Insane; on May 31st, your activity (Insanity) meter falls to 50% as half of the posts necessary were all on one day that is now out of range for the meter.