Question

Saw this option when I made a linked server

Answer 1

Basically it just enables you to improve performance for remote tables by not requesting meta data for each request, only when data is actually needed from the tables.

Lazy Schema Validation:

If this option is set to false, the
default value, SQL Server checks for
schema changes that have occurred
since compilation in remote tables.
This check occurs before query
execution. If there is a change in the
schema, SQL Server recompiles the
query with the new schema.

If this option is set to true, schema
checking of remote tables is delayed
until execution. This can cause a
distributed query to fail with an
error if the schema of a remote table
has changed between query compilation
and execution.

http://msdn.microsoft.com/en-us/library/ms190918.aspx