Hi Vinrocks
For Manual Scripts
The Parameters tab shows you all the parameters that have been defined in the Test Script and allows you to specify default values for those parameters. Then when you add the script to a Test Set - you have the option to change the default values. Then when you execute the script you have the option again to change any parameters that have not been set.
Test Configurations allows you to create variations/cases assigned to the same script where you may or may not want to preset some of the parameters. This means they will be fixed and can not be overriden when you add the test to the Test Lab.
For example. I might have a Web Order process that I need to run for 14 different countries - each which has a different URL. I can create 14 Test Configurations for the same script and set the Actual value to the required URL. Then when my offshore tester executes the test he has the correct URL presented
Thanks
Martin
[NOTE : the views express in this post are entriely mine and do not represent the views or policy of the organisation I work for]