Sorry to come in late, but I'm surprised nobody has answered this in 3 weeks.
'Enable RGB Filtering' will enable you to run VirtualDub filters in real time during capture. While this can be handy, I hardly ever use it because filtering is usually far too processor intensive to do in real time without dropping frames. You might be able to get away with a simple deinterlace, crop, and resize if you have a pretty fast machine, but anything more like noise reduction will probably cause some dropped frames. I would rather spend a little extra time and do some post-capture filtering than deal with dropped frames.
.....Cheers
