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No, you can have a huge number of people logged into a *nix system regardless of runlevel, so it has nothing to do with the number of simultaneous users. The way I think of runlevels is that they are different sets of startup instructions. You can configure what starts up in each runlevel to suit your needs. For example, you might have runlevel 5 start everything you would possibily use, then have fewer things auto start in 4, even fewer in 3, etc. I told you to start vncserver in runlevels 3, 4, and 5 because chances are very good that you boot into runlevel 5, but if you booted into another you would still have vnc server working. I boot into 3, because I don't want my xwindows to start by default. As with all things linux, you could customize each runlevel to do exactly what you want, but most people leave them set as they come from the install.
The computer switches to runlevel 6 when you give the shutdown or reboot command, and I have never personally used runlevels 1,2, or 6. I think 6 is used if you forget your root password, but I haven't had that problem.
Runlevels are are part of all distros. I would check out google.com/linux, and put in runlevels explained as your search terms. The first page of hits looks very much like what you're looking for.
I would urge you to do some search before posting questions. Not that we mind answering them, but if you tried google (even the non-linux specific google) you'd have had your answer faster than it took you to write your question!