Probably the most confusing option. I recommend leaving it on. That shouldn't happen, though. Smart windows tells the server to stop observing a game when you close a window locally, and vice versa. This can quickly clutter up your text window.
Tells are red, messages green, says purple, and challenges blue.
Puts channel tells in dirty yellow. There is a problem with admins telling to channels that will be fixed eventually. Hilights tells to channels 0 and 1. Don't use this option. When selected, Fixation scrolls the text window after every line.