Capacitors are devices that store electrical charge. Large ones such as you're discussing here, with a capacity of the order of 1 farad or more are often used in ICE installations as a buffer when power amplifiers demand more current than the car's electrical system can supply.
Typically this occurs transiently (ie. short and very loud bits).
Capacitors should be positioned as close to the amplifier as possible and connected with heavy duty cable.
A car battery is also an electrolytic capacitor and works on exactly the same principle. THere's no reason not to mount a battery close to your amps instead but with a battery the electrolyte is liquid so spills can be a major problem.
The highest readout will be the voltage of your cars battery.
The Lcd display tells you how much voltage you have left. If it's reading really low then you need a bigger cap. If it's staying high all the time then you either haven't installed correctly or your system isn't using that much juice.