% Stepover ? This is the amount the cuter will move over when cutting new material, ie 50% and it will move over 1/2 cutter dia on each revolution of the pocket.
Feedrate ? This is the feedrate that you want moves in X and Y to be, suggest you look up tool manufacturers specs or download some of the calculators, this is the one I used and still do on occasions.
http://www.wadeproco.com/Rapid height ? This is the height above the work that you want rapid moves to be made, ie its the safe height that wont hit anything such as clamps.
Feed Punge ? This is the feedrate at which the cutter will plunge into the material, try setting about 1/3 of your feedrate but will be cutter dependant.
Depth ? This is the total depth you want the pocket to be, 0.125 in your message above.
Step Depth ? This is the depth you want each pass to be until it gets down to the total depth set.
Hood