The RGB color settings control the solid Reg/Green/Blue attributes of a non-photo-textured material. Select the RGB values or click the Pick... button to select a color from the color picker.
If the Blend with Texture setting is checked, the selected RGB color will be blended with the photo texture when appropriate.
Since the Material name is shown on various dialogs and on the main toolbar Material drop down selector, it is a good idea to assign an appropriate name to an RGB material, such as the color that you selected.