If you are using a Custom Rom then you will have an insecure boot image so you can answer yes and it will do everything it needs to. If you are using CM9 then it doesnt have an insecure boot image set as standard so you will need to answer no to the question and the ToolKit will just reboot your phone into fastboot and then use the ToolKits insecure boot image to boot your phone and perform the mods. After rebooting your phone will revert to your original boot image.
If you are unsure about any of this just answer 'no' and let the ToolKit do everything but make sure you have the correct model selected in the Model Selection Screen.
So if I am reading correctly, after applying the new camera settings/new CWM/Wifi refresh, I will lose my ROM/Kernal? As it boots to original boot img/
So - then all I have to do is reflash my ROM/Kernal, and I am back to my original state - correct?