Understanding battle strategies...newbie question

[capnq]

"Damage until all weapons gone" needs more explanation: I forgot about that in my Last post. When that is lit, the percentages above it are ignored; your ship won't change targets until all the current target's weapons are destroyed.

we have choices under the "Tageting Priority Order" of the Firing tab, but how does the computer implement our choices? [...]
What algorithym does the computer use?

I'm pretty sure those are "tie-breakers":

The ship will pick a ship that matches the first priority; if there's more than one potential target that matches, it picks the one that also fits the second priority, and so on down the list. If more than one target matches all four choices, I think it's random.

It's hard to make specific suggestions for what strategy settings to use, because it will vary depending on your ship designs, your opponents' ship designs, and your preferred playing style.