AUX files are used in older Esri products in the ArcGIS suite to specify coordinate reference system information. They have the extension ".aux". You may want to generate Esri AUX files if your imagery will be used in Esri ArcGIS 9.1 or earlier.
To generate Esri AUX files:
AUX files will now be generated upon encode and output to the same folder as the output images.
To stop generating Esri AUX files, clear this check box.
By default Esri AUX files are not generated.