Files tab configures options related to MIDI file access and processing.
Monoaural mode removes all panninig commands from file.
Try to recover incomplete tracks - self-explaining. Works only with standard MIDI files, doesn't work with RMI, XMI, HMI, etc.
Remove B9 00 00 / B9 20 00 - removes evil meaningless instrument bank change commands which mess up XG hardware (fixes problems with some MIDI files bundled with Windows).
Disable sysex commands - removes system-exclusive messages. Not recommended, unless you really know what you're doing. This option might help to fix missing tracks under DirectMusic.
Fix missing DLS drum kits / instruments - (DirectMusic only) automatically remaps missing instruments; fixes most of problems with missing tracks under DirectMusic. Enabled by default. Disable if you are using non-DLS DirectMusic devices.
Show lyrics while playing - displays lyrics window when playing a file which contains lyrics.
Silence after end of song - self-explaining. It is recommended that you set at least 500 ms when you convert MIDI to WAV (to avoid artifacts at the beginning of song).
Keep last N files in memory - configures size of MIDI file cache. Not really important when playing local files via midiOut, but it speeds up DirectMusic loading a lot; extremely useful while streaming files (eg. when whole playlist gets cached, you can still play after disconnecting).
Kill cache - removes all files from cache. Some file-related settings take full effect after clicking this button (especially if you use DirectMusic).
View cache - views contents of cache. Also allows you to save cached files.
Minimize disk access - bypasses size and modification time checks when reloading file from cache.
Don't extract info from non-local files - avoids downloading files when Winamp only requests info about them.