The search section allows you to customize various settings for searching in previous translated strings.
General settings are common for all search types. If you check Automatically start search option then search is automatically started whenever you switch to another entry in the editor. At the moment there are at three posibilies you can choose from. But since KBabel can use dictionary plugins the available dictionaries depends what is actually installed. With Settings->Configure Dictionary->... you can configure every search engine plugin. The default installed dictionarys plugins are:
KDE Database Search Engine: This new method is still in alpha stage of development and base it task on KBabelDict which acompany KBabel. See KBabelDict documentation for further info on configuring search engine.
PO Compendium: The compendium is a normal PO file, which should contain a list of standard translation from your translation team. If you don't have one, you can also use a file that contains all used translations of your team (e.g. the $lang.messages file in the KDE Project, that can be found at i18n.kde.org).
PO Auxiliary: The auxiliary should help you finding the context of a translation by looking up the same message in a message catalog of the same package but translated to another language. This way you can have a look how this message is translated in another language.