Let's see...
In the Variable to Change box (the top one on Variable Operations), you have 3 choices: Single Variable, Variable Range and Variable Reference.
Single Variable and Variable Range you will probably be familiar with already. Variable Reference is a little different.
If I have a Variable [0001] called 'Number 5' which holds the integer '5', and I have another Variable [0002] called 'Number 1' which holds the integer '1'. If I use Variable Reference and select Variable [0002] and Set it's value to 3, then Variable [0001] ('Number 5') will now contain the number 3 and not 5. Variable [0002] will remain unchanged.
What it does is make a reference to the variable with the same ID as the value contained in the referenced variable and performs on the operation on that variable.
If that makes any sense. The Help file describes it as:
Changes the variable whose ID is equal to the value of the selected variable. For example, if a variable with value "5" is selected, the change will be carried out on variable 0005.
Which is probably 10x easier to understand than my example.
Value Stored in Index is described as:
The value is set to the value of the variable whose ID matches the selected variable. For example, if variable 0005 was selected, and the value in variable 0005 was 2, the value in variable 0002 would be used. To select the variable used
So if I have these two variables:
0002 - which contains the number 4
0005 - which contains the number 2
and set the operation to be :
Single Variable 0006
Set Equal
Value Stored in Index Variable 0005
Then variable 0006 will equal 4, because that's what the variable with the same ID as the value contained in the chosen variable 0005.
So, yeah, what you understood is correct as far as I am understanding it - I just figured going through it like that would make sure I got it too.
It's a little confusing I think to use them, and probably not worth the hassle you might end up facing. Figuring out bugs when making heavy use of this type of variable operation could be an explosive nightmare.