It basically determines if the scanner will treat talkgroups with a status bit set as different talkgroups than the base talkgroup. In ignore mode, the scanner will ignore any status bits (except the encrypted bit, which the scanner will act on and not switch to the voice channel) that may be in use on that talkgroup.
In Use mode, a talkgroup with a status bit set (i.e. multi-select) will be treated as a completely different talkgroup from the base. More information about status bits and their meanings may be found in the WIKI.
Mike