Having not jailbroken my iPhone (as yet) I couldn't say for sure but I would imagine it is what it says, the way you define yourself will adjust what Cydia will offer you in terms of apps, if you only ever want to use apps that you just click on a button go for 'user', 'hacker' is if you don't mind running stuff via commands etc. and 'developer' is pretty much as it says i.e. you want to get inside the apps themselves. Presumably when you load a package from Cydia it isn't obvious which category it falls into and they don't want people loading stuff in the developer category if all they want is a button to press.