Latency (or audio buffer size) is a term you will encounter often in audio software. Essentially, latency refers to the time it takes from the moment you (your software) request a sound, to the moment you'll hear it coming out of your speakers.
Your musician's intuition might tell you to keep this latency value at a very low reading. If performing live, this would be true. However, if you're sequencing it's generally a better idea to set latency a bit higher. When latency is lower, it places a much higher burden on your CPU and audio card. If you are trying to push too much audio via a low latency, it can result in pops, clicks, and other undesired results. If this happens, it could mean your latency is set too low, or your possibly using an audio driver format that isn't able to process all the data you're churning through it.
For more information on soundcard latency and audio drivers, check this article as well.