it's the overall circumference of the tyre, so 1 revolution of your tyre now will cover distance 'x' a new alloy with different size tyre will be 'y', so if 'y' is 10% longer than 'x', you will travel 10% further with each revolution, so if your speedo says 70 and you are doing 70, with the wheels 10% bigger your speedo will still say 70, but, you will be doing 77
215/60/16 = (60% of 215mm = 129mm) x2 + (16" = 406mm) = 129 +129 + 406 = 664mm x pie = 2087
215/45/17 = 97 x2 + 431 = 625 x pie = 1964
so, new tyres will be about 6% smaller than the old ones, so if your speedo says 60, you'll only be doing 56 have a look on here http://www.willtheyfit.com/