I always think of buffers like read-ahead buffers. It is how far ahead things read, so that the actual playing will be smooth. FOR INSTANCE.. if it takes 10s to convert a file into sound.. you'd obviously need at least a 10 second buffer.. or else youd have choppy audio.
Im not super solid on the tech side of things... but I know that you only need to mess with buffer settings if you hear "choppiness" (skips or dropouts) in multitrack playback. In which case you can try to remedy it by adjusting the buffer size used (though choppiness in multitrack playback can also be attributed to the background mixing process not being far enough ahead). A greater buffer size will require more of your computer's memory. If you do experience break-up in multitrack playback and the background mix seems to not be at fault, try increasing the buffer size (up to 2 first, then 4 if need be, etc), or switch to a faster (non-compressed) hard drive.
mmm-kay?
xox