A heuristic is a "rule of thumb," something that works often but isn't 100% reliable and/or can't be proven correct.
Turning them on might catch a mutated or self-modifying virus than the fixed signatures can't catch, but might also give you false positives from normal code snippets that just look a bit like a virus signature.
I don't use AVG myself, so someone else will need to tell you the effect of turning them on in actual use, though Google and/or AVG's help/forums (if any) would give an answer too.