Different settings change the amount of orange or blue color cast, usually to compensate for any cast in the lighting. If you have no blue or orange cast you get neutral whites, which is what you usually get if you use the settings suggested by the instruction book. The Fluorescent settings take out the green from Fluorescent, mercury, HMI and metal halide lights used in your garage, sports stadia and parking lots. Forget about shooting under orange street lights: they'll always look orange because they are orange. White balance only adjusts far enough to make lights that look white to us look white in photos.
In the AUTO mode the camera makes its best guess for each shot. I use the AUTO white balance mode when I can. It works great in my Nikon D70 and Canon A70, but poorly in my Nikon D1H. Even though it may or may not work well for normal photos, AUTO (also called AWB in Canon) almost always works great for under weird mixed artificial lighting without flash.
AUTO (also called AWB) mode works OK with flash and indoors and outdoors. Usually the images will still be fairly blue in shade and pleasantly warm indoors at night. When the flash is on most cameras automatically switch to flash white balance.
The fun starts when you take it out of AUTO and set it yourself. Here's what the other settings do:
Tungsten (symbol of a light bulb also called "indoor"): Very, very blue most of the time except indoors at night, for which it looks normal. "Tungsten" is the name of the metal out of which the bulb's filament is made. Even indoors many people prefer the warmer AUTO setting. TRICK: Set
Daylight (symbol of a sun): Bluish normal. This is a little bit bluer than I usually prefer. Only use it for shooting test charts in direct sunlight.
Cloudy (symbol of a cloud): I prefer this. It's a little warmer than the daylight setting and best for most shots outdoors in direct sunlight. Why not the daylight setting? The camera manuals are written by engineers, not artists. The engineers are interested in copying color test charts, not making a good photo. I prefer things on the warmer side.
Flash (symbol of a lighting bolt): Almost identical to cloudy but sometimes redder depending on the camera. Use this the same way. On Nikons like the D70 you usually can set separate
Shade (symbol of a house casting a shadow): Very orange. This is perfect for shooting in shade, since shade is so blue. It's also for shooting when you are under a cloud on a partly cloudy day since most of the light is coming from the blue sky. It's also for shooting in
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