Well the previous answer is not quite correct: You use that button in case you want to plug in a guitar directly, without any DI-Box or an active amp. This button enable Hi-Z mode, and the impedance is different from a line input or a mic input. You can:
- Connect a microphone via XLR: Just connect it to XLR in
- Connect a device with line level such as a keyboard, CD-Player etc.: Connect to Line/Instr, and deactivate the Guitar button
- Connect a guitar: Connect to Line/Instr and activate the Guitar button