Proportional vs. Equal weighting is a setting when you weight by category. It only makes a difference if you have columns with different points possible in the same category (e.g. a Discussion category with columns worth 5 points and columns worth 10 points). If all of the columns in the category are equal, both settings work the same way.
When you have categories of differing values, Equal Weighting converts the columns to percentages and averages the percentages to get the category composite grade. It essentially gives each item equal weight when determining the composite grade. Proportional weighting calculates a category composite grade by adding the raw scores and dividing by the total points possible. This retains the proportional weight of each item, so items with a larger value have more effect on the composite grade.
For example, consider two assignments in a category, one worth 5 points and the other worth 10 points. Assume the student gets 5 points on each assignment.
Equal weighting: 5/5 and 5/10 = (100% + 50%) / 2 = 75% (or you can think of converting it to equal Points Possible: 10/10 and 5/10 = 15/20)
Proportional weighting: 5/5 and 5/10 = 10/15 = 66.7%
The category composite grade is then weighted according to the percentage you indicated for the entire category and combined with the other columns or categories you have included in the Weighted Total.