What is the Neutral Language setting used for?

I believe it sets the NeutralResourcesLanguageAttribute for the assembly. From the docs:

The NeutralResourcesLanguageAttribute
informs the ResourceManager of the
language used to write the neutral
culture’s resources for an assembly,
and can also inform the
ResourceManager of the assembly to use
(either the main assembly or a
satellite assembly) to retrieve
neutral resources using the resource
fallback process. When looking up
resources in the same culture as the
neutral resources language, the
ResourceManager automatically uses the
resources located in the main
assembly, instead of searching for a
satellite assembly with the current
user interface culture for the current
thread. This will improve lookup
performance for the first resource you
load, and can reduce your working set.

Does that help? You might also want to look at Kim Hamilton’s blog post on the topic.