By default DokuWiki uses PHP's libGD (see gdlib option) however ImageMagick's convert is more powerful but not always available. If it is installed on your server you can give its path here and DokuWiki will use it instead of libGD.
If you don't know what to put here, ask your provider. It's often even documented in the provider's FAQs. Common paths are /usr/bin/convert or /usr/local/bin/convert on Linux servers, and on Windows C:\Program Files\ImageMagick-6.4.3-Q16\convert.exe or C:\software\imagick\convert.exe.
Be carefull when using ImageMagick with many or large files (i.e. when using Gallery Plugin). This can generate a high load or even freeze the server. In comparison, libGD is limited to PHP's performance settings and should be safe to use.