what rebound setting on my fork does Let me get this straight.

If I turn the knob to the left it reacts faster. 

If I turn the kob to the right it's slower
You are correct.  The reason for the rebound control so so you can adjust the fork for your riding. 

If the rebound is too fast, the fork acts like a pogo stick - you hit a bump, the fork soaks it up then 'pings' back so fast it unweights the front wheel, (with fairly predictable consequences) when it happens while cornering. 

If the rebound is too slow, you go over a bump, the fork soaks it up, but before it rebounds back you hit the next bump. A few bumps later, the fork is at the bottom of its travel (with predictable consequences). 

The trick is to adjust the rebound so its fast enough that the fork recovers without bottoming out, but slow enough that it holds the front wheel firmly on the ground. There is a little science behind this, but as every rider, bike and trail is different, there is not way to tell you how you should set your fork up.  On top of all this is (if its an air shock) - the amount of air pressure in the shock affects the amount of damping needed. 

If you have air shocks, there is now some science around setting them up - you can buy/beg/steal/hire a Shockwiz