Context parameters supply information, particular to a given placement of your widget, back to your widget server. Your widget server can use this information to make smart decisions about how to serve the widget at load time.
For a simplistic example, you could choose to pass the _sl_ptv parameter back to your widget server. This parameter indicates how many times this particular end user has viewed this placement of your widget. At load time, your widget could include a note that says "You have viewed this widget __ times," filling in the blank with the number from the _sl_ptv parameter.
To use context parameters, click on My Spinlets, click the Edit button for the desired Spinlets widget, and click Edit in the "Context Parameter" section. You can then choose which context parameters you want to pass to your widget server.