This option will plot paired values of two variables using a two dimensional (x,y) coordinate system. The resultant plot gives a visual idea of the relationship between the two variables.
There are several extra options at the bottom of the dialog box. You can alter the plot symbol used, by clicking on the symbol popup button. You can also alter the colour of the plotting symbol. Other colours are set in the Preferences dialog. You can decide whether the origin (ie 0, 0) is included within the plotting field, and whether you wish the linear regression line & equation (in the form: y = mx + c) and correlation coefficient are added to the scatterplot.
See Plotting Routines for more general information as well.