Flomi,
Trackback is a way for other people to link to let your blog engine know that they've linked to you. It's actually an older standard and is in the process of being replaced by pingback because of the misuse of this feature. The trackback link is included so that other people reading your blog entry can right click the link and choose Copy Shortcut (or the equivalent in your browser). Many people who have discovered this for the first time have found the Wikipedia article on the subject to be a helpful place to start.
Regarding your settings above, they are configured to allow you to include trackbacks and to allow you to recieve trackbacks. Allow Trackback comments says that if I enter a post, I can go to one of your posts, right click the Trackback URL and include it in my Trackback textbox when I'm creating my post. This will send a Trackback request to your blog which will add a comment to your comments basically saying that I'm linking to your blog post. This auto addition to your comments happens because you've checked AllowTrackback Comments. You are not currently requiring approval for trackback comments, so they'll appear automatically.
The Trackback Auto Discovery feature basically means that every time you publish a new post, DotNetNuke will scan your post and look for URLs. It will then attempt to read the contents of each page for each URL to see if the page supports Trackbacks. This autotrackback feature will probably not work with most of the major blogging services since they've moved on to pingback which isn't implemented yet in the DotNetNuke Blog module. I thinkn TypePad may still use Trackback and of course other DotNetNuke blogs can understand Trackback pings.
My suggestion would be to just ignore this feature for now if you don't need it. If you think it's going to be confusing for your users, then you can remove the Trackback link by changing the module.css file so that the blog_trackback class is hidden.
.blog_trackback {display:none;}
HTH,
Don