Ok Luke,
the Zs repesents the earth fault loop impedence. It consists of Ze (the external earth fault loop impedence) + (R1 +R2). R1 is the phase and R2 is the CPC (sorry if you are now sucking on an egg!)
So you are actually measuring the entire fault path from the supply transformer all the way to the house, through the dis board, down the phase to end of the circuit, then back along the CPC and incoming Earth cable to the supply transformer again.
Essentially what you are doing with the meter is strapping a resistor (about 10 ohms) between phase and earth (like a fault), which will cause a fault current to flow. The meter then measures this fault current and calculates the earth fault looop impedence from it, so it will display a value in ohms.
So lets say it measures a value of 1 ohm, then using ohms law I= V/R (actually Ia = Uo/Zs but its the same ting) , so I = 230 / 1 so a fault current of 230A would flow. If the Zs was 2 ohms, then only 115 amps would flow.
Now, take a Type B MCB (BS EN 60898), this has a an a trip current of 3 to 5 times In (its nominal setting). So a 6A breaker would trip at between 18-30A. Now the higher the fault current then the quicker it blow. And as we have just seen, the value of fault curent wil depend on the Zs. So the lower the Zs, the higher the fault current and the quicker the MCB will blow.
If the Zs is too high, not enough fault current can flow and the MCB may not trip at all.
Sockets, for example have to discconect withing 0.4 seconds of a fault, so take the (typically) 32A MCB they are protected by, this will have a maximum Zs value to allow enough fault current to flow to discoonect within this time.
in the OSG, if your circuits comply with table 7.1, then you just flip to the table of Zs values for your 60898 MCB, and read off the Max Zs value directly. If you are using BS7671 then you take the 'rule of thumb' and use only 3/4 of the value on the table plus further possible adjustments for ambient temperature.
For taking the Zs reading think of the worst possible scenario for the fault occuring - its at the end of the circuit where the resistance is highest, so this is where you measure Zs. if you have done your R1 R2 readings (which you will have!) then take the Zs at the point where your R1 R2 is highest. With test meters you will either just coonect to phase, neutral and earth, or just to phase and earth if its a two lead instrument.
Be aware the fault current you are introducing is EXACTLy what the RCD was put there to detect, so it will trip. Modern meters now have a 'no trip loop' setting (or something like that) so use that (with the 17th edition most domestic circuits wil be on rcd's anyway!)
You dont need to disconnect anything, the circuit should be exactly the same as when the fault is goning to occur (some books reccomend disconnecting the earth when measuring Ze)
there is an argument (of which i agree) that Zs values will be largely redundant for domestic circuits with the 17th, because the RCD will always trip long before the MCB
Hope this has been of help!