Under Signal set-up, there is a frame setting for Drop or Non Drop. Can someone please tell me what this is and where I should have it set to. Thanks.

It's a SMPTE time code standard used to compensate for a timing issue introduced when NTSC went to color. You can read the full explination here:
SMPTE time code - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/SMPTE_time_code)

Basically, if you plan to have your material broadcast in the US, check with the TV station. They will probably require that you use Drop Frame Time Code. If it's not to be broadcast, then you can use either Drop or Non-Drop.

Just read the wikipedia and now i'm even more confused. Is the bottom line that if I dont use drop then TV stations wont air the footage?

Your footage does not change regardless if you are shooting drop or non-drop. You can change back and forth in the NLE. It's just a numbering system.

Drop-Frame follows clock time, so that when the footage says 1hr, an actual clock hour has passed. This is not so with non-drop as you'd be slightly past a clock hour. Broadcast has to work on a strict time-clock.

Again, time-code is re-assignable after shooting. Don't panic over this.

Thanks guys, your input is appreciated!