Link to custom UI . If you don't know what that is yet, that's okay. We are going to discuss it more in a moment. If that is unclear look at the jpeg above of the parameter window. Description is simply an area available to you to describe your variables.
Good documentation is important.
Be clear about what each Variable is for. This makes it so Users won't be able to get into your Smart Clip later and inadvertantly mess with things. You can see in the Library that the normal MC icon has changed a bit. For Your Smart Clip Macromedia says that a UI is not required for your Smart Clip, but it is recommended. A UI is a means for users of your smart clip to access and modify your Smart Clip's variables.