NukeCoder

Configuring your shop correctly is a very important step and should be done before you do anything else.

• Site Url - Enter the url to your site, including the http://.  This is used for several things(paypal forms, emails, etc.) so it is important that it is correct.
• Site Title - This is used in the title bar to identify your site (standalone only).
• Theme - This will list any folders in your templates directory for you to select.  You should avoid directly editing the default template.  Make a copy of it and name it something else.
• Single Item Mode - Selecting yes can allow multiple users to sell items in your shop and is good for selling items that are usually bought 1 at a time.   Selecting No will enable the Shopping Cart allowing users to purchase multiple items in one transaction.
• Items Per Page - This limits how many items show per page when browsing the shop.
• Show Category Item Count - This will count and show how many items are in a given category, including sub-categories.  This can be turned off because it can slow down your site if your shop has alot of items and traffic.
• Enable Coupon Codes - Use this to turn on coupon codes.  Even with the coupon codes turned off it is still possible to add/edit/delete the codes.  The coupon form will not show to customers unless you enable this setting.
• Auto Start Uploads - If set to yes, the uploads on the Add Item page will automatically start in the background when you select a file from your computer.  If set to no, you will have to click a checkbox for the upload to start.  See the Adding Items section for more info.
• Show Template Vars to Admins - When this is enabled, admins will get a popup window with a list of all variables used on the current page.  Very helpful for customizing your template.
• Show on Main Page - This give you options to show certain types of items on the main page of your shop.
• Show on Main Page Limit - Limits the number of items shown from the above option.
• Approve Purchases Manually - If enabled,  will require that admins approve each purchase in order to prevent fraudulent purchases.  Otherwise purchases are automatically approved so the user can download their files instantly.
• Enable Captcha on Free Downloads - Require users to enter a security code to download free items. (You can add your own fonts to the fonts/ folder.  The captcha system will randomly select fonts from that folder when generating the captcha code.)
• Enable Search - Enable or disable the search feature for the shop
• Enable Item Sorting - Enable users to change the sorting order of items on the public side.
• Default Sort Order - Default sorting order of the items on the public side

• Item File Path - This is the protected folder that all shop files are stored in.  It is highly recommended that this folder is not accessible from the web.  This can be a relative path (../somefolder) or the full path (/home/user/somefolder)
• Item Image Path - This should be accessible from the web and should be a relative path.
• Category Image Path - This should be accessible from the web and should be a relative path.

• Email Fraud Alerts - Email the item owner an alert if a suspicious purchase has been detected by the shop.
• Deny Unverified Paypal Accounts - This will deny purchases from unverified paypal accounts by flagging them as a fraud attempt.  The administrator can then decide to approve or delete the purchase.
• Use Paypal Sandbox - This will allow you to make test purchases in paypal's sandbox environment.  You must have a developer account with paypal to use their sandbox.
• Owner Paypal Email - This should be the shop owners paypal email address.   This address is used for all shopping cart purchases and for any item that does not have a paypal email explicitly set.
• Currency Code - The default currency code used for transactions and is used if the item does not have a currency code set.  See paypal's website for supported currencies.
• Currency Symbol - The currency symbol displayed.  Use html entities when possible  (eg. € ).
• Payment Notification/Receipt - Turn payment receipts on or off.   When enabled, emails are sent for all types of transactions.
• Payment * Subject - Subject for emails sent to user.  {$item_name} is replaced with the item name in Single Item Mode and is replaced with "Cart" in Cart Mode.
• Paypal Connect Method - How to connect to paypal.  The default is fsock and is fine for most setups.
• Use Proxy to Connect - Some hosts like GoDaddy.com require using a proxy to make secure connections.  This setting only applies if the above is set to cURL.
• Proxy URL - If above setting is set to yes, enter the proxy's ip address or url including port if applicable.  This setting only applies if the above is set to yes.

I would say the rest of the settings are self-explanatory