The VAE is a small separate file which improves the quality of images(Resolve faded colors and ugly eyes)

But if you are interested in what it means: https://www.reddit.com/r/StableDiffusion/comments/zamt9y/what_is_vae/

In general, most models don’t have the vae baked in, so I would suggest equipping a VAE file unless it specifies that it is baked in.

Without VAE

It is recommended to use the vae provided by the model you are using, however personally I prefer to use the Stable Diffusion 1.5 vae, as the colors are quite vibrant

Before (No VAE)

Before (No VAE)

After (With VAE)

After (With VAE)

To do this, go under settings, stable diffusion and change SD VAE to the vae that you had selected:

In this case, I am using the stable diffusion vae under the Google Colab:

When done, remember to click “Apply Settings” and the vae file will be applied

Summary

Personally, I would suggest using Stable diffusion as the vae for all cases except when generating with anything v3.

Stable Diffusion VAE        Anything v3 VAE     Waifu Diffusion 1.4 VAE 2 Waifu Diffusion 1.4 VAE 2

Stable Diffusion VAE  

Stable Diffusion VAE

Anything v3 VAE

Anything v3 VAE

Waifu Diffusion 1.4 VAE 1

Waifu Diffusion 1.4 VAE 1

Waifu Diffusion 1.4 VAE 2

Waifu Diffusion 1.4 VAE 2