The Arguments Tab in the Edit Target Wizard is used to set the default program and vm arguments for new PDE launch configurations. Arguments can also be edited on the Environment Page of the Target Editor.
Pressing Variables will open the Variable Selection Wizard. You can browse through all known variables and get descriptions of what each does. Under the VM Arguments group you can also press Import. This will open the Import Arguments Dialog. You can use it to import vm arguments used in the configuration data of any installation locations you have added to your target definition.