Chroma delay, or chroma/Luma delay or Y/C delay (all the same thing) relates to the timing errors between the colour signal path and the luminance (black and white bit) signal path.
It's necessary in Y/C and Component Y,Pr,Pb systems to compensate for the idiosyncracies of the cable length and the processing differences between the different signals. It does sometimes affect Composite signals to cure bad decoder design, but that's not it's main use.
What you will see when you adjust this control is colors on the picture moving left and right relative to the black and white detail underneath. Find a colorful, detailed scene (actually coloured text is the best!) and freeze the picture by pausing the DVD. If you look closely at the point where a color changes dramatically, when you adjust the Chroma delay you should see the colour 'bleed' out from the edge that it should be on.
If you had, say a change from black to red (possibly the easiest to see!)
instead of seeing a clean black, then clean red, you would see black, then dark red then lighter red if the chroma was not delayed enough or black, then grey then red if the chroma was delayed too much.
Hope this helps !