From my understanding it adjusts how much the speed difference in players is emphasized. Lower meaning more, higher less. So in my case I use a speed threshold of 25, which means that speedy back can (and should) outrun the slower lineman etc. That said though this seems to be a very controversial subject here as you'll see guys who claim a higher rating is more realistic.
I keep mine at 35. I'm a pretty average skill passer though so it works for me. I also extend the CPU the courtesy of my pass defense being at 35 and he carves me up sometimes.
I completely agree. The CPU needs help here and without it he is way too easy to shut down. I keep mine at CPU RB Ability 55, CPU Run Blocking 75, Human Run defense 45. The CPU seems to average 3-6 ypg and is a real threat. If you're not vigilant he can bust big runs on you (setting his ability to 55 is going to increase his broken tackles, jukes etc).