The default will leave the image name as it was uploaded if there isn't already an image with that name.
The rename option can be set to any string, but has two tokens [NewFileName] and [Increment] so that if you left the default the first upload would be named: "MyImage.jpg" and if you tried to upload it again it would be named: "MyImage_2.jpg".
You can remove the underscore or adjust the new image syntax as you see appropriate.