The image import options determine how YouTube videos images are imported into WordPress. These options can be found under plugin admin menu Videos, page Setting, tab Image options.
When checked, this option tells the plugin to also import the video image into WordPress media gallery and set it as featured image for the post created based on the video details retrieved from YouTube. In this case, the image will be imported at the moment when the post is created.
When image importing is allowed (Import images option is checked), by enabling this option you can delay the image import option until the image is actually needed. In this case, the featured image won’t be imported at the time that the post is created but a later time, when WordPress will need to display it somewhere in your website. This feature is useful if you want to remove some load from the import process since image processing is usually a resource consuming process.
This option allows you to set the maximum image size that you will import from YouTube for your imported videos. Please note that WordPress will still create all registered intermediary image sizes, no matter what maximum image size you choose here.
The extra option present for this option (retrieve maximum resolution image), when checked, will try to determine if a large version of the image is present and if it is, it will override the main option and import the maximum resolution image. Please note that not all videos have such image size.