The help for the Effective Permission tab says, " If you want to find out what permissions a user or group has on an object, you can use the Effective Permissions Tool."
So this is a tool to test your security to see if it is working, and how. When you set up permissions you are eventually looking outwards at the perimeter fence around your yard. When you are looking at effective permissions, you are looking back inwards from the outside world to see which doors are open to a particular person (or group).
Start by clicking on 'select' to the right of "Group or user name:" which gives this dialog box:
Click "Object types..." and check only "Users" for now. Then click ok.
Then click "Locations..." and select a location this user has access to. On my system I only have one computer to select from. But if you had access privileges on other machines they would show up here. Make a location (host) selection and click ok.
Now to help you see how the next box works, click the "advanced button". You will see a list of all users who have any access to this resource on this machine that you have selected. Select one of the less privileged users, like guest and click ok.
Now notice that you can type in this as well under, "Enter the object name to select", and you can also enter several machine\user choices (at the same time) here.
Click ok to return to the Effective Permissions tab with your new selections. I selected Love2/Guest and this shows that Guest has no effective permission on my machine, which is correct, as it sure better not have any permission as I have not granted any permission to guests.
Now go back and select a different machine/user pair, like your primary account for example on your machine. Now when I click OK to return to the effective permission tab, I can see that I have full control of all permissions. Remember this is for the file or folder that I inquired about when I started this whole process. In my example this is the folder: "Milwaukee shear blades".
Hope this helps you understand what this tab is for.