This option give you a secondary dialog (Shown below) asking, when the deletion is made do you want to shift the cells up or left or whether you want to delete the entire row or column.

 After any operation, even if you delete entire rows or columns, Excel renumbers them, this makes it confusing as to the difference to 'clear' above.  What you actually do here is 'delete', for example any formulas related to deleted cells will now have #Ref! errors, even though the cell reference is still there! To test this type Nick in A1 and your name in A2, now go to A1 and select Edit>Clear>All and Nick will be gone and your name will still be in B2, now re-type Nick in A1 and select Edit>Delete... and select move cells up. Now my name will be gone, but yours will be in A1.