Status Variables are normal numeric or string variables, but their values are constantly displayed in a status area on the Quest window. Examples of variables you might set up as status variables are health and money - so the player can always check how healthy they are, how much money they have etc. by glancing to the right-hand side of the Quest window.
You can add and edit status variables by selecting "Status Variables" from the tree menu.
Adding a Status Variable or selecting a Status Variable and clicking "Edit" will bring up another window from where you can specify the name of the variable, its type and its initial value. The Numeric type means the variable holds a number, and the String type means the variable holds some text.
The "Display" box allows you to specify how this variable will be displayed in the status area of the Quest window. Use an "!" character where you want the value to appear, and use "*" characters to surround any characters that only appear in the plural. For example "! potato*es*" will go up "0 potatoes", "1 potato", "2 potatoes", "3 potatoes", etc., as the value of the variable increases.
Tick "Don't display when value is zero" if you don't want the variable to appear in the status area until its value is non-zero - useful for variables that are only relevant later on in a game.