Welcome aboard the forum.
Short questions are often the hardest to answer, but I'll try...
VCO = Voltage Controlled Oscillator. It's an electronic device that many manufacturers add to the pinpoint audio function. It simply produces varying audio outputs based on target voltage.
If your coil's center is directly over a target, the target voltage seen by the detector is at its peak. Therefore, the pitch of the audio output of the VCO is the highest. If your coil is not centered over the target the audio output has a lower pitch since the target voltage is not at its maximum.
As you sweep your coil across a target, the sound (driven by the VCO) increases as the center of the coil approaches the target...the loudest sound is produced when the target voltage is the highest (hopefully when you're directly over the target).
Obviously, depth plays an important part. A coil directly over a quarter at six inches will have a lower target voltage than the same quarter at one inch. That same quarter lying just below the grass will often drive the target voltage (and subsequently the volume of the output response) very high...resulting in an unpleasantly high pitched sound in your headset. Many headsets contain a limiter switch that keeps your ears more comfortable when pinpointing a very shallow target. (I use my limiter switch a lot in parks.)
If you turn VCO off, the machine will simply grunt when the target voltage appears under the coil...not necessarily centered. By having VCO on, you'll get a rise in the headset as the center of the coil approaches the target.
Sorry for the somewhat crude explanation, but it's my first cup of coffee at 4:30 am.