Dashboard options let you configure some settings to apply to all widgets in the dashboard. This means that instead of applying the same filter to every widget you can just set it once on the whole dashboard.
For example, say you’re creating a dashboard to track the performance of your advertising on AdWords:
You can use the dashboard options to filter the whole dashboard to only include this data:
The above settings would give you a dashboard where all data would have the values "Google" for Traffic source and "Paid" for Paid / Organic. That is, AdWords data.