I'm not too sure about 'Instant Codes' myself but the other options under 'Cheat Switch' are pretty obvious

Off = regardless of whatever cheats have been selected - they are NOT in use in game
On/Off[Sel+] = This option allows you to turn On or Off the cheats you have selected from within the game itself

The button combinations are
Press 'Left' on the + button while pressing the 'Select' button = Cheats On
Press 'Right' on the + button while pressing the 'Select' button = Cheats Off

Always On = Obvious - the cheats are always On

Under 'Soft-Reset / Realtime Save Switch'
Off = No Softreset or Real time save is avaliable
SR: LR+ABX = Softreset will happen if you press Left & Right shoulder button, along with [A] and [X] at the same time
SR: LR+ABY = Softreset will happen if you press Left & Right shoulder button, along with [A] and [Y] at the same time
RTS: LR+Select = Real time save is allowed when you press Left & right Shoulder buttons & [Select] at the same time
RTS: LR+Y = Real time save is allowed when you press Left & right Shoulder buttons & [Y] at the same time
NB: you can't have Softreset AND Real time save on at the same time

 

When you start a game, the cheats are enabled a few seconds in. Sometimes games with anti piracy fixes in the cheats will not load if this is the case, so M3 team decided to include an option for the codes to be enabled right at the load of the ROM. When/if i use cheats, i just enable the regular way unless it's necessary to use instant codes.