Here you can specify which products the discount coupon should be applied to or not applied to by using the Only the following products and All products expect for these radio buttons. To add products to the list, click the Add products button and check the boxes next to the appropriate items in the displayed selection dialog. Product items can be removed from the list at any time using the corresponding checkboxes together with the Remove selected button. You can also remove all listed items at once by clicking the icon and performing the Remove all action.
More resources concerning products can be found in E-commerce Guide -> Managing your store -> Products.
Further information about discount coupons can be found in E-commerce Guide -> Managing your store -> Discounts.