According to my accountant, if that setting is referring to the CVV code on the back of credit cards, checking that box will take you out of PCI compliance.
According to the PCI regulations, you are not allowed to save the CVV *at all*.
The default settings in the cart are PCI compliant. The credit card is saved using 256 bit encryption. You can check the box to not save credit card if you dont want the credit card saved in your db at all. Regarding cvv, this feature was built for customers in Europe where they dont have as strict PCI regulations as the US. The default for the cvv is to NOT save it. If you are in the US you should never check this box and we will add a warning message to the screen indicating such.