The advanced options makes use of the different arguments of the WP_Query function http://codex.wordpress.org/Class_Reference/WP_Query
This allows you to filter by custom taxonomies or any other argument listed on the page above. If you wanted to filter posts by categories look at this section: http://codex.wordpress.org/Class_Reference/WP_Query#Category_Parameters
You could set a Paremeter of category_name with a value of latest and that would filter your posts to only show posts with a category called latest. Additionally you could use the cat parameter and set the value using the category id that you want to filter by.
Whe you take a look at the WP_Query page, if you see something like:
$query = new WP_Query( 'cat=4' );
cat is a parameter and 4 is a value.
You could also filter posts by author. Example from WP_Query site:
$query = new WP_Query( 'author_name=rami' );
author_name would the parameter and rami would be the value.
By using the + button to the right of the Query args in your Ditty Post Ticker you can combine filtering by category and author, or any other arguments.
These are also query args, but they are a little more complex, so I needed to create a separate set of inputs for them. http://codex.wordpress.org/Class_Reference/WP_Query#Taxonomy_Parameters
You set a custom taxonomy that a post type(s) uses, select to use either the the id or slug of the term you want to filter, and then set the term id or slug.
Hopefully this helps you out. If you are unfamiliar with WP_Query it may take some time to fully understand that page. But, if you play around a little with my settings and look at the documentation you should be able to figure it out.
If you have any specific questions about something you are trying to do let me know and I’ll help you out.