That would most likely depend on how the game you are trying to modify uses normal maps.
A tutorial for Skyrim character model normal maps can be found here.
Normal maps are a method of applying bump mapping on 3D models, see https://en.wikipedia.org/wiki/Normal_mapping.
In Skyrim normal maps are used by many model types: character, tree, weapon etc.
That option is only relevant when creating or editing cube maps, it should be left unchecked for other texture types.