That setting determines the distance between scan lines when using the Engraving option. It will affect everything that is engraved (raster and vector).
The number value is in thousandths of inches. 1=0.001in (.0254 mm)
If you change this to 2 (0.002 in) the engraving should take about half the time because the laser will cross the design half as many times.
@Scorch Thanks mate, is there a large quality drop from 1 to 2 steps, is 1 the most common setting for people or is it common to bump it up to a higher setting?
The best setting it a personal choice. I suggest you experiment with the setting to see how it affects the results for your particular application. Also check out the discussion under the cow tags for additional information. https://plus.google.com/101479367502614716645/posts/Sr5gnG5Pggk