Dip switches are actual hardware switches on the main circuit boards of arcade and computer systems. Most often they were used to configure lives, difficulty and coin values for arcade machines as well as many other options on computers and consoles.
Space Invaders Dip Switches
The options that show up are fairly self explanitary but if you mess it up you can delete the
.cfg file for the running system in the
C:\Mame\cfg folder and any changes will revert back to default. Also, if you change anything on this menu then you need to use the "Reset" option at the bottom of the menu to enable the changes.