There are four values for type: Question, Incident, Problem, and Task. While the field can be blank initially (and through any number of updates), once you change the field to a specified type, you can't change it to blank again. Setting the type helps you to categorize your tickets, which you can then use in your workflow. For example, you can create views of tickets by their type.
Question is used to indicate that the requester's issue is a question rather than a problem that needs to be solved.
Incident is used for occurrences of a problem that affect more than one person. For example, if the wireless network in an office stops working, the problem will probably generate several support requests. Instead of handling each ticket separately, create one ticket describing the problem and set the type to Problem. Next, link the incident tickets to the problem ticket. When you solve the problem ticket, all of the linked incident tickets are solved too.
Problem is used to indicate that the requester is having an issue with your product or service that needs to be resolved.
Task is used when you want to assign the ticket as a task to a specific agent. When you select Task, you also set the Task Due Date which is 12pm in the account local timezone on the due date.