Percentage (default 50%) scales every image by the same factor. A 4000 px wide photo becomes 2000 px and a 1200 px screenshot becomes 600 px. Each keeps its own shape. Use this when the images are similar and you simply want them all smaller.
Dimensions (default 800 x 600) gives a width and height. With "keep aspect ratio" on, each image is scaled to fit inside that box without distortion, so a landscape photo touches the width limit and a portrait touches the height limit. Leave one box empty to fix only the width or only the height. With the ratio off, every image is stretched to exactly the size you type, which distorts any image that does not already have that shape.