There was a good explanation of what the pipelined DSP is and why is was necessary in a thread on this forum, but it seems to have disappeared into the ether. If I had known that would happen, I would have archived them myself. I think I should take all such technical explanations and put them on the official website in the future...
At the moment there are two DSP cores--one that is pipelined and one that is not. The DSP switch sets the DSP core on and the pipeline switch selects the pipelined version of the DSP core (otherwise, it uses the non-pipelined DSP core). In a nutshell, there are some games that rely on the effects of a pipelined CPU like the GPU and DSP are in a real Jaguar and so the pipelined version was written. It's still not 100% correct, but it's close. It's also
very unoptimized and so it's several times slower than the original DSP core.
My take is that you should use the original DSP core for those games where it works and use the pipelined DSP for the games that it works with, at least until the pipelined DSP has been optimized (at which point the old core will go away).