Microsoft Project Server 2010 workflows are built from Microsoft SharePoint Server 2010 Site Workflows which are built from Windows Workflow Foundation, which in turn is built from Microsoft .NET Framework 3.5. The workflows are made up of workflow activities that are objects that have code within them.
The Project Workflow Settings page designates the Workflow Proxy User account so that the Project Server Interface (PSI) calls in a workflow can be performed. By default, all PSI calls in a workflow are made under the context of the Workflow Proxy User Account. For these PSI calls to be successful, the Workflow Proxy User Account should have appropriate permissions in Project Server 2010. Therefore the only item to be set on this page is to make sure that the Workflow Proxy User account text box contains a logon account that has sufficient permissions.