Normal-Based Mapping options

Creates a planar UV projection based on the average vector of the face normals in the active selection.

Use these options to set what happens when you select UV > Normal-Based.

Settings

Keep Ratio: Retains the width to height ratio of the image so that it does not distort. Turn this off to cause mapped UVs to fill the 0-1 UV space.
Insert projection before deformers: Use this when the mesh has a deformer applied to it to ensure that the texture placement is not affected by the moving vertex positions.
UV Set: Enable this to place the projected UVs in a new UV set. You can specify the name of this new UV set in the appropriate field.