A project can contain multiple targets. For example, an app I write has four – the app itself, a Quick Look plugin, a framework and a bundle that contains Mac OS 10.6-specific functionality that can be dynamically loaded in.
Project settings apply to every single target in the project. Each target can then override individual settings if they need to – for instance, my project’s Target SDK is set to 10.5, but the 10.6-specific bundle has it’s Target SDK set to 10.6.
In some instances, some settings don’t make sense to be in Project Settings – one of these, I guess, is search paths.