I think Howard was merely making the point that he can't answer the question of whether you need https or not. The https protocol provides secure communication between client and server using a public key encryption algorithm. In terms of moodle logins it means that noone could intercept usernames and passwords as they are being passed from client to server. Unless you have some very sensitive information on your site it's probably not necessary.

Some service providers will set this up automatically. However often by default it will point to a different location eg
http://mymoodle.example.com => /home/mymoodle/public_html
https://mymoodle.example.com => /home/mymoodle/ssl
If this is the case then you will be locked out of your moodle site - hence the warning on the admin->configuration page.

You could always check to see if it will work (prior to enabling it in the Admin->configuration page) by visiting your login page using https eg
https://mymoodle.example.com/login/
If this doesn't go to your login page then https is not set up in a way that will work with moodle.

Finally, moodle actually does a very basic check to see if you can use https. If not then it disables the option in Admin->Configuration. If you can then it is still no guarantee that it will work.