This paradox is a reference to the fact that Banquo was the historical descendant of King James, who was the ruler of England at the time that William Shakespeare wrote and produced the play Macbeth. Although Banquo will never be king or rise above the position he already has (unlike Macbeth, who will become king of Scotland), his descendants will eventually become royalty. Macbeth and Lady Macbeth never have children, which is a huge problem for them and for noble society in general. There is at one point a reference to an infant that might have died, but besides that, Macbeth is fated to die childless. This means that his throne will not be passed on to those of his line/blood, which is a big deal.
On the other hand, Banquo's bloodline will continue on, and prosper. Later in the play when Macbeth hires murderers to kill Banquo and his son, Banquo dies but his son Fleance escapes. The audience is to presume that Fleance's escape is a direct reference to King James's ancestry. Macbeth is upset by this because he fears that the prophecy will come true--that he will never have children to carry on his blood and name, but that Banquo's kin will become kings.
In Act 1, sc.3, Banquo and Macbeth, on their way home from battle, encounter the three weird sisters on the heath. They hail Macbeth calling him Thane of Glamis, Thane of Cawdor, and King. These are predictions of Macbeth's future. Banquo tells them that if they can look into the future, then they should tell him what his future holds. They hail him and say, "Lesser than Macbeth, and greater." They go on to say that he won't be king (lesser than Macbeth), but he will be the father of kings (greater) - "Thou shalt get kings, though thou be none,".