The Referral ID is very important feature. Each affiliate has his/her unique ID generated by PAP which is called User ID (or Affiliate ID).
But an affiliate can have a Referral ID which is actually the same, but the difference is that Referral ID is defined by the affiliate. So the tracking is easier for all - you can better remember that your ID is "lucky7" than "5i9mfot4"... Also link looks more familiar too:
www.yoursite.com/?a_aid=lucky7 (it is better than www.yoursite.com/?a_aid=5i9mfot4)
Referral ID can be hidden or it can be set as optional - just navigate to Configuration> Affiliate Signup> Fields
There are also few plugins that can do something useful with referral ID. Check it in Plugins panel.