For the best sound quality, 16 bit sampling is desirable. Speak Freely translates 16 bit Pulse Code Modulation (PCM) samples into an 8 bit logarithmic encoding known as mu-law (µlaw), which effectively squeezes 13 bits of audio information into each 8 bit byte. If your sound hardware supports 16 bit samples, that mode is automatically chosen. If, for some reason, you want to run in 8 bit mode (which sounds worse and doesn't run any faster) you can do so by checking the Options/Use 8-bit Audio menu item.
If your hardware supports only 8 bit samples, this menu item is automatically checked and disabled, since you don't have the option of using 16 bits.