THD is just the value of the amplifier's harmonic distortion to a single sine-wave frequency (there's also Inter-Modulation Distortion, IM, which is the result of one sine-wave frequency affecting another, but that value is not often given expect for good high fidelity equipment). You don't do anything with it, other than use it to compare with other amplifiers. Obviously the lower this value is, the better.
N is the noise. It's difficult to separate the distortion products from the amplifier noise when doing the distortion measurement so it usually includes both or THD+N.
Edit: The distortion and power output are two of the most important parameters for audio power amplifiers. Another consideration is the power supply voltage required to obtain the rated power. Some amps can operate closer to the supply rails and thus dissipate less power for a given output power.