It's not very well documented I believe and possibly not even working properly with certain settings, so there's not a lot of information about it. Basically it is the shared memory settings, as in access to game telemetry from other apps. The Shared Memory and UDP version settings can be set to either PCars 1 or PCars 2 format, while the UDP frequency setting should adjust the rate at which the data is sent out, with supposedly 1 being the highest and 9 being the lowest (and off probably being a kind of "auto/don't limit" setting).
The optimal settings are...whatever your app needs it to be set to. Most tools seem to be using PCars 2 shared memory with PCars 1 UDP version for compatibility reasons (as the PCars 2 version might apparently be lacking important data, so people tend to use the PCars 1 version of the data stream), but again, it depends on what your specific app needs. If you're not using any external tools, you can most likely turn shared memory off completely and not worry about it at all.
