Read this great article over at www.mothering.com:
20 Reasons You Should Hire a Doula

Ever heard of the purple line? It is an indicator that many (but not all women) have that makes dilation visible on the outside without doing a vaginal exam (which can be uncomfortable in labor and also increase the risk of infection). The purple line starts at the anus and extends up the natal cleft (butt crack), growing higher as a woman becomes more dilated. When she is completely dilated, the line will be at the top of the crack. I have seen this in labor, and am fascinated by it. It doesn't work for everyone, but it's great to know about!

This is a great article that talks about the purple line and other helpful ways you can tell how far along you are in labor: Dilation -- How to Check Without Checking. 

If you want to learn more about the Purple Line specifically, this article goes into greater depth: The Red/Purple Line: An Alternate Method For Assessing Cervical Dilation Using Visual Cues.