Bump adjustment basically changes the amount of oil that flows through the valves as the piston compresses ie. in a right hander the left suspension is being compressed by the loads and the spring is trying to push it back to the level positon, the speed at which the oil flows through the damper valves also controls the amount and speed of this compression.
In addition, there are 2 types of compression to which the car will be subjected:
Low speed - the gradual build up of force under
cornering or braking.
High Speed - when you hit a pot-hole or ride the kerbs on a circuit (eg.
the right-hander after the jump at Pflanzgarten).
For road applications bump adjustment concentrates on adjusting the low speed compression, certain race products (3-way adjustable) also offer high speed bump adjustment to allow the suspension to be adjusted for each circuit (some require you to use more kerb than others), but unless you take a suspension engineer with you everywhere, know the circuits completely and are looking to save every tenth/sec. then you don't need to worry about this. One big performance advantage of the KW Variant 3 is that it has a patented 'high speed' bypass valve-system (pre-set to suite the car by the factory and non adjustable) which greatly improves comfort and stability on both road and track compared to other dampers.
Rebound adjustment is the reverse situation, ie. this is controlling the speed at which the spring is able to force the oil back through the damper valves as the suspension extends. To little rebound results in the car yawing as the damper fails to control the spring - too much and the suspension will stay compressed and be rock hard.
The key is being able to adjust the car for comfortable
use on road and competitive use on track, this way you can have the
best of both worlds
Also as you get used to the settings/adjustments and what they do you
can fine-tune them to adjust the handling characteristics of the car
ie. by decreasing the rear bump power compared to the front you will
make the car more tail-happy, reduce the front bump and increase the
rear will promote more understeer
I hope this makes it a bit clearer. The good thing is (with the KW kit anyway) you cannot fully open or close the valves (which would make the car really dangerous) the adjustments are within a specified "safety zone". Also its true what's been said in some of the other postings on this subject, suspension technology has moved on leaps and bounds in the past 10 years and you get what you pay for. In fact, 10 years ago you couldn't buy a coilover kit for a roadcar , they were exclusive bespoke products for the top level of motorsport
Best regards
James Scott
Recaro UK / KW Suspension