the first formatstring gets you the number of total files from the number of files you have selected. the second gets it from the tracknumber if it is stored in the format tracknumber/totaltracks e.g. 1/17 , 2/17 ,...
$if($grtr(%_covers%,0),Y,N) gives you Y for one or more covers and N for no cover.
%_counter% gives every file a new number at the same field if you format more files. It's useless if you format the directory because in this special case it's always the first file from which the values are taken, so the counter would always be 1 (unless you format more than one folder ins one go). It can be usefull if you want the titles to be called simply track 1, track 2, track 3, you would use "track %_counter%" in this case.
I am going blind and with the date shown if varible, i missed the second ' . Anyhow your examples were excellent.
The clarification of %_extension% and the difference between total and totaltracks was great. This sort of stuff should be explained in the user guides. You saved me another 4 hours of searching and eye killing strain.