Check here for info on how CPU throttle themselves:
the percentage refers to how much of the total capacity can be reduced when a thermal threshold is reached. by using 25%, you are telling it to reduce your CPU's clock multiplier to approximately 75% of its normal maximum value. Auto would presumably adjust the percentage based on how effective the throttling is in controlling the temperature.
EG a 4GHZ cpu (a 100Mhz chip and a 40x clock multiplier) would reduce the multiplier to 30x (75% of 40x) and the resulting total frequency would drop to 3Ghz.