Video Quality is related to the video size, the higher the quality is, the larger the video size is going to be.
Audio quality is related to the audio size, the higher the quality is, the large the audio size is going to be.
Video codec and Audio codec are key to how the video is going to be encoded with, e.g. you have selected video codec as WMV8, audio codec is WMA2, and the output format is Zune WMV, then you will get a WMV file with video codec of WMV8 and audio codec of WMA2. If you have selected video codec as WMV7, audio codec is WMA2, then the output file will be WMV with WMV7 and WMA2 as video and audio codecs respectively.
Resolution is related to the image size with the unit of pixel, generally in ppi (Pixel per inch). The higher the resolution is, the larger the video size is.
Channel is a concept related to the audio. It is with two types of stereo and mono with the respective aural feelings.
Frame rate (fps, frame per second) is related to the video visual effect. The higher the frame rate is, the smoother and more vivid the animation will be. But frame rate adjustment over 75fps will be not that obvious.
Sample rate is to decide the sound connection point, which is a little related with the audio continuity.
Aspect ratio is the ratio of video width and height.
Letterbox is the black edges that the program helps to add when changing the aspect ratio.