By default, WordPress® sends messages from wordpress@yourdomain.com. This setting allows you to set a custom email address that the plugin will send from rather than the default. There are two parameters: the address, and the name.
As an example, if you want your messages to come from: John Smith <email@yourdomain.com> then you would set the email address as email@yourdomain.com and the name as John Smith.
These settings are optional and if not used should be left blank. If you already have a plugin or filter that provides this site-wide, there is no need to respecify it here.
It should be noted that some hosting providers place restrictions on emails sent from server-side scripts, and some may require that scripts sending email messages use a legitimate email address as the from address.