once per session - check the site you visit for updated pages once every time you run k-meleon, then use the cache after that... good if you visit pages that change between sessions, but don't need to refresh every time you hit the 'back' button, for instance...
always - always download the page, don't show stale versions... an extreme setting, but useful for sites where the content changes many times in a browser session. slower, though, obviously, since you download the page every time you view it.
never - opposite of the above... basically 'offline browsing', using the cache whenever possible.
automatically - i don't know exactly what the behavior for this one is... but in any case it uses some criteria to decide whether to refresh a page or not.
i use 'once per session' and refresh manually when appropriate, myself.
hope that helps.