PPM = Pulse Position Modulation.
PCM = Pulse Coded Modulation.
All transmitters emit a signal at a given frequency. Let's assume 27MHz. The signal itself (otherwise called the carrier frequency) is simply being sent at a frequency of twenty-seven million times each second, but doesn't do much else because it carries no information. This 'information' thingy can consist of anything such as voice signals, or, in this case, encoded pulse signals that the R/C receiver can hear, and then converts (decodes) the information from the carrier frequency to a pulse that the servo can understand.
In the case of PPM, the pulse signal for each servo channel can be on for as little as one millisecond (servo horn at its left extreme position) or on for as long as two milliseconds (servo horn at its right extreme position). From this you will be able to deduce that a pulse length of 1.5 milliseconds will put the servo position at its neutral (centre) position). The PPM signal is then repeated over and over again - usually around twenty times each second. Your servos are being updated with the relevant information of its position 20 times per-second (or 50Hz), in essence giving the effect of the servo arm moving quite smoothly whenever you move, say, your rudder or throttle gimbals. Also, the PPM information is sent sequentially, meaning that channel #1 position is sent first, then channel #2 position, then channel #3... and so on. If, say, you want to alter the position of the servo on channel #3, the PPM signal first sends the information for channels 1 and 2 before reaching channel 3. This happens so fast that as soon as you move the gimbal which controls channel 3, it appears to happen almost instantaneously.
Clever stuff.
PCM, on the other hand, works in a slightly different way. The PCM signal is superimposed on the carrier frequency in the usual way, but instead of the pulses being sent sequentially, they are now 'sampled', meaning that they are sent in the form of a digital representation of the usual PPM (analogue) pulses. The buzz word is 'resolution'. The higher the resolution, the better the quality of the transmitted pulse signal. It's all to with 'bits' and 'bytes'. In your case the PCM resolution is set to 1024 bits. You can do all sorts of clever things with the digital signal, such as to tell the R/C receiver to ignore bad burst of data, or operate failsafes, etc, etc.
Me, I personally prefer to stay with the PPM (analogue mode) for reasons I shan't bore you with here.
Incidentally, I wonder if you can turn on and off, say, a light switch at exactly 20 times each second, and hold it on for a duration of exactly 1 millisecond (one-thousandth of a second), then repeat the process over and over. Then try doing the same at 27 millions times each second. And did you know that 1GHz is the same as one thousand million times per second? You'd need a pretty slick wrist action to operate the light switch at that rate, huh? Around these parts, that aforementioned wrist action is otherwise known as the 'vinegar stroke'. And being that this is family forum, it's best that I don't go into detail about it.
Are you beginning to wish that you never asked now?