To address the specific title question. I think the state that these settings refer to is also known as P-StateP-State.
Meaning, it's a control over the peak CPU frequency (and as the link explains, also the voltage used).
There is also a more technical documentationmore technical documentation of the implementation of the power saving techniques implemented in the Vista line of Windows operating systems.
To my understanding, this is where you can see the currently set maximum CPU frequency of the system:
