Mode 1:
Enable slower HDD access. Passes data from the HDD slower for games
that rely on the speed the data is coming from the CDVD.

Mode 2:
Enable DVD9 support. (Figure it out yourself)

Mode 3:
Remove the Loader from the memory after the game is patched.
Some games flush the location where the loader is (because some cheat programs
use the same location), and if after that the game resets the IOP (when the loader
kicks in to patch stuff) and the system is still patched to enter the loader it crashes.