The Comments block adds a Facebook comment box where users can comment on the page or some of its content. The parameters are fully described at Facebook. Comment blocks may be added throughout your site and be associated with one of more Facebook applications. Each comment block is specific to the location identified by the "URL to comment on" parameter. If used on the same page as a Like button, both blocks must be associated with the same Facebook App as they each use the same meta tag for the page to identify app administrators.
The normal use would be to enter the URL of the page containing the comment block for the URL. The "Number of Posts" determines how many comments to display. The width is for the overall block. Facebook recommends a minimum of 400px. The color scheme changes the appearance for use on light or dark background pages.