How does Cool know what the latency of my soundcard is?
I don't think that's what it says: instead it says that CEP can tell what the incoming sample rate (which may or may not be related to the latency) is, and can resample it to match what the recording is set to. Latency is actually a whole set of other issues. I posted my method of determining latency in another forum for you yesterday.
The "Correct for Drift", in other words, does the correcting at the source, rather than trying to calculate how far off it will get. Let's say that your sampling rate is set at 1000 samples/sec (ridiculous, I know, but bear with me) and the incoming rate is 1500 samples/sec. This will throw the new track off 1 second every 2 seconds. The "latency" fix would be to delay the existing track that one second; the CEP "Correct for Drift" would resample the incoming track to 1000 samples/sec and synch it up that way.