Potential ability is from 1 being the lowest upto 200 being the best. If Walcott was 175 on FM07 then that means he can potentiallly become very good indeed(he has a higher PA on FM09 now).
There is also a - scale for younger players where potential ability is put within a range rather than an exact figure. e.g. -10 means that the PA can be random each time you load a new game from 170-200. A PA of -9 would be 150-180, -8 would be 130-160 etc etc
I can suggest new features to the development team, but then so can anyone on the SI forums.