What is the "preload" setting on the front fork suspension? I've made a photo of the actual "thing" as I find it very difficult to explain otherwise:



I'm wondering what this "thing" sets and how it actually works. So, what is "preload" and what happens when I turn it clockwise (plus) and anticlockwise (minus). I tried rotating it both ways to its maximum limit and I didn't notice any change in anything.

The bike the photo has been taken from is Merida Matts 40-D.
This fork setting exists so that the fork can be customized to your weight (major reason) and riding style (minor reason). It's simply the initial compression of the internal spring in the fork. The more it's compressed, the stiffer the fork will feel.

Bigger preload compresses the spring more, and so it's best for heavier riders and/or people who need/prefer the stiffer ride (racers etc.)  Lighter riders should use less(-) preload. Less(-) preload will also give you plusher ride, but the bike will e.g. dive more during braking.

Source: http://bicyclethailand.com/setting-the-sag-on-mtb-suspension-forks/