This feature allows your guests to tell you their choices when they RSVP to your event. For example, let's say you were going to have dinner at your event, and you wanted to know what each of your guests would be eating from a choice of chicken, fish, or vegetarian. You would put separate fields (by clicking the "add an answer" link) for chicken, fish, and vegetarian, then you would set the limit according to how many people could choose from those options.
If you wanted some or all of the options to be available for selection from all guests, simply set those answer's limits to 0 or leave them blank to give unlimited choices. However, let's say you only had enough fish for 30 people. You'd set the limit to 30 on this answer, and then once the 30th person had selected fish, any guests that RSVP after this would not have fish as an option.
Read the tutorial about How to Create a Poll.