your tail number example. N1234AB, or if you operate under a call sign like DAL123, you would put that in. My understanding is, it is part of the mode S operation and not used yet in the US. I think some of the advance systems in Europe might be able to see the Transponder transmitting your call sign from this feature.
It's for Mode-S ops. Most advanced avionics (Primus, Honeywell, Etc) that have mode S transponders are usually factory preset with your "N" ID and are auto-linked so you don't do anything. Air Carriers, Military operators usually have the ID manual option when they change flight numbers or call signs. You can use the diagnostic mode to see if your ID is preset on most Mode S transponders. Mode S is in operation in Canada, Most Oceanic, Some Asian and all EU ATC Facilities. Some day the FAA will jump on board with Mode S like the rest of the world. Our G450 and 550 are preset.