The Morph option allows you to modulate and combine the sound of one program using another program. The 2 arrows under the morph section determine which program is being modulated, and the morph slider allows you to control the amount of morphing that is occurring.
It is difficult to describe in words exactly how the sound is affected, so we encourage you to try morphing out for yourself. You might be surprised at the unique sounds you can create through morphing!