The High Quality setting is used to tell the codec being used on the selected track to use any higher quality decompression that may be available. This availability is very codec dependent; not all codecs have high quality features.
Turning on High Quality generally takes playback out of the real time mode--higher quality equals lower throughput.
Example: Playback of a 16 bit color or 24 bit color movie on an 8 bit color display. With High Quality turned on, the dithering to 8 bit color is better than with it turned off. However, the higher quality dithering may come at the cost of real time play back depending on the speed of the CPU.
Another area where the High Quality setting makes a difference is with text displayed from a text track. With High Quality turned on, the text is rendered as anti-aliased text. Without High Quality turned on, the text renders without any anti-aliasing. As with other High Quality media, playback of anti-aliased text is at a lower speed than when High Quality is turned off.
So what is the benefit of the High Quality setting? If you are going to recompress a movie, which is a non-real-time action, the typical level of compression artifacts is reduced by turning on the High Quality setting for those tracks which can respond to a high quality setting.