I'm sure RobRich is writing a lengthy reply to this or he is going to after I'm done.
A rule of thumb is to make it 1/2 your system RAM. If you have 512MB, make your AGP Aperture 256MB and so on.
I believe it's basically just memory that can be shared by the system just for the video card. If it's not needed, it's not used. If it is needed, it can have up to the amount you set.
Okay Rob, your turn.