Scene editor guide. Page 4

Lights - position

Select a light from the combo box, turn it off or on whith the enable check box, and then choose one of the three command pages to change the position, color or spot parameters of the selected light.

Shown in the picture is the light position command page.

By default a new scene has a single light (light 0) enabled, and it is positioned at (0,0,1).

The W coordinate has a special meening: when it is 0 the light is said "directional", if it is different from 0 the light is "positional". A directional light is at an infinite distance in the direction specified by the X, Y, Z vector.
A positional light is at the position X/W, Y/W, Z/W. You need to set the light positional to see the effects of the exponent and attenuation controls in the spot page.

Again refer to an OpenGl book for a good explanation.

The W=0 button is present because it is difficult to bring the W value exactly to 0 with the scroll bar (even when the label shows W=0.00 the real value can be different from zero due to rounding errors in the floating point operations).