Options → Options → Code Generator sets the code generation options that will be applied to newly created forms (except ones created from templates). They may be overridden by settings in Tools → Generating Options.
These settings apply to newly created Forms. They can be overridden in Tools → Generating Options.
If Generate OnEvent code is not checked, Message Loop code will be generated; if it is checked, OnEvent code will be generated.
If Generate events for all controls is not checked, event code is only generated for controls that have the OnClick property set in Object Inspector; if checked, event code is generated for all controls.
If Expand %var% variables is not checked, Captions are converted to code literally; if checked, characters between % signs are taken to be the name of a variable, possibly resulting in an expression.
An example: Info for user %user% will be generated as “Info for user ” & $user.