The thumbnail will be what is displayed to users when they arrive at your post and when they are browsing the grid. If a youtube link is provided it will overwrite the images in both places.
Category:
A category will enable people to browse for your file. A default category of MISC is assigned.
Description:
The description will be used to explain how to use the file to your viewers. This section will also be indexed for searching the page
Visiblity:
By default, files are private and only shown to you. if you wish to share these files publicly please enable "show to public"