Controls the two palettes that the diagonal Podoboo flashes with. Take the first palette you pick, subtract 8, and multiply by 2 to get a valid value for this. The second palette will then be that value times 2.
For instance, the original value here is 4 (palette A), which times two is 8, and converting that back into a palette (divide by 2, add 8) gives you palette C. So the Podoboo flashes between palette A and C.