By default, bbnuke calculates ERA based on a 9 inning game, however there is an option to change this based on your typical game length on the settings page. For instance, my league plays 7 inning games so we would change this value to 7.
ERA is a calculation of a pitchers average runs allowed per game (9 innings). So, if a pitcher pitches 3 innings and allows 3 runs they are averaging 1 run per inning. Over the course of a 9 inning game, that calculates to a 9.0 earned run average.
You can find an explanation of ERA and how it is calculated here