Just to add some more to what alandamp said (which is correct)...
Most dvd players have similar settings, but named differently. For example, my Onkyo dvd player has the same option but it calls it 'PCM downconversion' and the choice is OFF or ON.
When it is OFF, 96 kHz signals from a DVD will be passed untouched thru the digital out to the receiver. You would have to have a receiver with at least 96 kHz dacs to use that setting; if the receiver does not have 96 kHz or higher capable dacs, you would hear nothing. By changing the setting to ON, the player will downsample 96 kHz signals to 48 kHz, which even older digital receivers can handle.
The downconversion setting is also for the case of copy protected dvds at 96 kHz which cannot be passed digitally. With those dvds, you must have downconversion on to convert the signal to 48 kHz; otherwise you will hear nothing. I personally haven't encountered such a dvd yet, but I know they exist.
So those settings are to enable you to match the output sampling rate to a rate that the receiver's dacs can handle. If the receiver has 96 kHz dacs, set it to 'up to 96 kHz'. Anything higher will get downsampled to 96 kHz.