The Interpolate function takes the scattered data points and creates a smooth line. The drop-down box gives the polynomial order for the equation that will be used to generate that line.
The developer who created the library used in RomRaider for that data smoothing wrote this article.
http://www.developer.com/tech/article.php/762441Check it out if you think mathematics is fun. If not, pick a number that you like and stick with it. To be honest, I don't know why someone would use other than the default setting, except just to "see what happens".