"Max stacking frame" option

[Khorne Flakes]

How exactly does it work? Option "1, 2, 3 or 4". What does it do?

[Pungent]

Look up pre-rendered frames/framecount. tl;dr increases the amount of frames your system prepares in advance before the one that is currently being pushed to the display.

[Merin]

From my understanding, you can pre-render, or "stack" frames that are going to be processed by the GPU after the current frame. If you're having FPS stability issues, having the CPU "stack" say, 3 or 4 frames, means that the GPU can have a more streamlined queue of frames ready to be processed at all times, and this means more stable FPS, because it will rarely if ever run out of stacked frames at the ready.

However, this means the CPU is clogged up doing this task constantly. Many stacked frames can result in a less responsive CPU, which means input lag for the user. Having TOO low stacked frames can be a problem too. You can introduce instability and/or jittery fps with a lot of stuttering. I believe the general consensus is:

Never use 0 pre-rendered frames
Use 1~2 if you have input lag issues
Use 3-4 if you have FPS stability issues
Go somewhere in the middle if you have no issues
Never set a global value to pre-rendered frames in the Nvidia Control Panel / CCC. Tweak it per-game, and only if you see a reason to.

Edit: I would use the lower settings for VT2, because it's a CPU heavy game, unless your graphics card is very old, and you've already hit the lower settings.