Conversion tracking allows you to isolate visits that reach certain pages in your site. You are basically saying 'if a visitor reaches this particular page, let me know and make this visit stand out in the stats'. You can track different types of events: we provide up to 5 different conversion trackers.
For example: you could have a conversion of type 1 when a visitor uses your 'contact us' form, a conversion of type 2 when a visitor signs-up for your newsletter and finally a conversion of type 3 if the visitor reaches the sale confirmation page.
With this setting, you are telling Web-Stat to send you an alert email every time a conversion of a certain type is detected. Of course, for this to work you have to define your conversion pages first in the 'Track Conversions' section.