What is "Enable Script Links" used for?

^^^ … Under Panels/Scripts Scriptlinks…

Also, can I add a custom script that has its own options screen to the panel area? For example a custom knife tool, etc?

Enable script links lets you set up a python script to execute every time some certain thing happens, such as every time a frame changes. A good example of a script that uses this interface is the demolition.py script you can search for in this forum.

As for adding a custom options to the buttons panel, I’ve never seen that done and I don’t think it can currently be done. However, with the event refactor and the Python API refactor going on now, I think this, or something like it, may be possible in a few releases.

You can also look at my latest use of the frameChange event here:

http://blenderartists.org/forum/showthread.php?t=113222

Thanks for explaining!