on the Performance submenu
which i quite believed no one has quite explain them yet since they are implement in 2.65/2.66…
apologies if these options have been demystified 
The first box is the size of the tiles (buckets) that render your image in pixels. The second box, well I’m not so sure I can explain it well without confusing the issue. With that being said, dynamic is the one most used and would be the best choice for things that are moving in the scene. With static active it has to rebuild each time there is a change.
To read some technical stuff about BVH (and possibly increase some confusion) look here http://en.wikipedia.org/wiki/Bounding_volume_hierarchy. It’s basically a way of grouping objects together in a volume before testing the actual geometry surface to speed up rendering. Sort of.