They control the "temperature" of the air coming through the centre vents.
The blue one provides cold air through, the red one warmer air. Cannot remember if the red setting provides it at the same temp as the rest of the system or not, as I only ever really use the blue setting.
Yup, a bit confusing! I normally have neither selected, I put the blue one on if the car is being heated (cold day) but I want cool air blowing on my face.