Auto KnowlEDGE: Looks into your KB for exact questions with only 1 response - think "exact hit" on your keywords
Multi KnowlEDGE: Looks into your KB for exact questions with multiple responses - more like "closely related content" for your keywords
NOTE: Stop words (common words: a, the, etc.) don't effect Auto/Multi Knowledge, the reason those are multi knowledge is because the same question is duplicated in your Knowledge Base.
Suggested KnowlEDGE: Performs a broad search across your KB and displays the top responses - think "lots of options loosely based on keywords"
For more suggestions on how to keep your Knowledge Base up to date check out this blog: "Keeping your Knowledge Base Updated"
Screenshots with more details: