Setting this value allows the bot to try and identify with NickServ. Once identified, other services can choose to give this bot higher powers... Further information on what is NickServ can be found here. It goes without saying that your IRC Server must be running the NickServ service. The bot name must be registered with NickServ first. There are a few ways you can do this, but one that works well is to:

• log into IRC
• /nick botname (for example, /nick hudson-bot)
• /msg NickServ register secretpassword
• NickServ should respond with a successful message

Then you can log out, set the password here to "secretpassword" and allow this bot to attempt to log in.