We're still not 100% sure about the formula. This is the formula Asus uses to calculate the temperature, however it does look a bit weird (Brainslayer called it "Voodoo math" on the SVN commit LOL), so we can't be 100% sure. Personally, I think there's a good chance this formula is indeed correct. Intel has a similar method of calculating the temperature of their CPU. The internal register returns the temperature in reference to tJunction, which is typically 100C for most CPUs. So if the register contains 40, then the CPU temperature is 100-40, so 60C.
The only way to be sure would be to have access to the Broadcom HW sheets, and knowing how Asus implemented it (sometimes, the value might be different based on an external resistor connected to some specific CPU pins, for example). Or to have someone with an infrared thermometer to see if the temperatures do make sense (keeping in mind this value is probably the internal, not external temperature).
Overall, I'd say: take it for what it is, which is, a reference value. It will at least allow you to see if the temperature is higher than other people report, or if there is a sudden increase in temperature. So long everyone calculates it the same way, it will be useful enough.