The parameters are the means by which you pass data back and forth between the automation starting the activity (and presumably taking over after the activity has completed), and the automation that will actually perform the activity (inputs and outputs essentially). For example; if I have an activity called AddNote, I would need to supply (at the very least) the text of the note to be added. The activity might also need to supply some sort of flag indicating whether or not it was able to add the note and if not, provide a message as to why. These three items would be parameters of the activity.