Do I need to modify the settings?

Not if you don’t want to. They are set up for the most basic use case - a single layer design, without any extra features.

What unit is the downloaded stl file in?

.stl files are unitless, so there isn’t a unit to select. When you go to print, you can simply scale as needed.

What does each setting do?

Grid Size: Allows you to quickly resize the grid.

Cube Size: Changes the relative sides of the base building block.

While stl files are unitless, you may want your base building block to have different length sides relative to one another.

Baseplate Thickess: Adds a backing to your design.

When thickness is specified, a solid block is created below the design that many units thick. The baseplate will be built up to the edges of the design. If you want the baseplate to extend beyond the design, specify an overlap.

Prevent Design Deletion: When checked, this will prevent your design from being deleted when using the remove rows or shift design buttons.

Sill: Adds a ledge you can site your design upright on.

When thickness and height are specified, a sill will be created. The sill is added just below (and touching) the lowest pixel on your design. If you add a baseplate, it will be below the baseplate.

Overlap Corners: Larger numbers ensure diagonal pixels touch.

Under ideal circumstances, diagonally placed pixels won’t touch. With a little bit of slop in a print, or due to how a design is sliced, some bridging will likely occur and they will connect. If you want to ensure that they touch, increase this number. A suggested starting point is 0.05