Hi,
The z axis value controls your height, up and down. Large z axis values are higher, smaller ones are lower.
The "Fixed Height above Terrain" controls let you keep the camera a certain height above the terrain as the camera moves around it. It's purpose is to help keep the camera above the terrain. If it is unchecked the camera will stay at the same height when you move it around, and that might mean you move it underneath a hill without realising.
There are several ways of moving the camera. You can change its position using the x and y fields in the Rendering Control window. You can move the camera in the terrain preview in the Rendering Control window, or in the Landscape - View & Sculpt window. You can also move the camera using the 3D Preview.
If you have the fixed height checkbox checked then whenever the camera moves it will be kept at the same height as you specify in the text field to the right of the checkbox. You will notice that the z axis value is changing as the camera moves. What is happening is that TG is finding the height of the terrain under the camera and then setting the camera z axis value to that height plus the value in the fixed height text field. If you change the camera z axis value directly then TG recognises that you want the camera at a certain height and so it updates the value in the fixed height text field.
If the fixed height checkbox is unchecked then the camera stays at the same height ( z axis value ) when you move it around. As described above this may mean that you move the camera under a hill or something, but of course there are also times when you aren't worried about and don't want the camera to move up and down as you move it around the terrain.
The best way to figure out how this stuff works is to play with it a bit. You can use the 3D Preview to see the effect the settings changes have.
All of the above also applies to the target position settings in the Rendering Control window. Just read "target" wherever you see "camera" :-).
Regards,
Jo