Ultrabuffer is the Nero's RAM buffer.
Before commencing a write, Nero will fill the software buffer, lets call it 80Mb, the suggested maximum.
As the write starts, the drive will quickly load it's own buffer (2Mb) from the Nero buffer - and now that is no longer full, Nero will read source files as fast as possible, until full.
Now if your source speed is good, the files not small and scattered, and the writer not contending the same IDE as the source, then the Nero buffer should settle in to a 97-99% flicker, with the drive buffer staying 99% loaded as well.
If the source hits a slower patch, smaller files etc. then the Ultrabuffer will fade down, as it covers the difference between data in and out.
When the Ultrabuffer depletes completely, and the drive buffer, underrun recovery occurs - Nero will refill the buffer completely before restarting.
If it's jumping, but not hitting zero, then it's doing it's job, smoothing out any bumps in throughput - the only reason to use a smaller value, is shortage of usable RAM, since you do not want to cause additional swapping, especially to the drive that is also the data source.