The participant/observer roles are useful in the relationship view to help you see at a glance which characters actively participated in a scene. Those are the ones who had dialogue, participated in the action whether it was blowing up a bank or eating dinner at a restaurant. The observer/witness is someone who wasn't active in the scene but saw or knows what went on. It could be a security guard who watched the crooks wire explosives through the security camera or a diner who sat at the table next to the main characters and overheard an important conversation. The roles won't really help show whether they are main or secondary characters, since both of those can be participants and observers in any scene.
Regarding the "Allow multiple per event" option, think of it this way. An event probably has a single location, but there could be many people involved. You might want to set Place-> Location to not allow multiples and set Character -> Observer to allow multi. I think the important thing worth noting is that "Participant" and "Observer" are just sample entity roles. They aren't in the manual as they are really up to you to define. If you don't feel you need one or both of them, they can be deleted, renamed or you can add your own properties to track. I find that this sort of flexibility is one of the real strengths of AT2. I spend most of my time in relationship view once the events are in place. Seeing the sequence in the timeline is nice, but seeing all the hidden relationships is what helps keep me out of the weeds so far as continuity goes.
Thank you both for your replies. Both very helpful. Tina, my views are similar to yours though I might use differing terms. My confusion came from seeing 'observer' as the default when adding a character to an event: that's the default role. So I assumed that the software was telling me something I didn't know. I understand better now. Razr, thanks for the info re changing, deleting, renaming... Gave me a real 'I get it' moment. I'm also checking out the relationship view properly for the first time. I see what you mean. Coming at this with a good deal of info still to be loaded I still have work to do before I leave the timeline view as my default but the info is really helpful. Thanks again to you both.
One super-power you will have in relationship view is the ability to use filters to do specific queries. You can do simple things like: "Show me all events with status "To Do" Or you can do complex filters: "Show me all the events which take place on Main Street before Sept 1, 1927 which include John and his dog but not Mary OR Elizabeth." Of course, when you start fiddling with "Group By" and use the little gear to hide specific columns you can get some very unique and informative screens. My wish for a future version of Aeon Timeline is that we be able to save these relationship views similar to the way we can save bookmarks in the timeline.
As well as arcs I'm setting up tabs as I go to let me extract the over-arching stories that I mentioned before. I'm still entering data and look forward to trying out your tips. Thanks.