"Variable speed" refers to the fan motor inside the air handler — the indoor part of an air conditioner that moves cooled or heated air throughout the ductwork. An air handler is usually a furnace or a blower coil.
Unlike conventional single-speed motors, a variable speed motor runs at a wide range of speeds to precisely control the flow of heated and cooled air throughout the space. Better airflow control has several benefits:
Variable speed motors can actually save you money on your energy bills, as they consume less electricity than standard motors.
Variable speed technology also means you will gain air conditioning efficiency or SEER.
Variable speed motors are excellent for zoning, which allows you to customize your comfort in different areas and control your energy bills.
A variable speed motor can also help clean the air. When the fan is in constant operation (indicated by the "Fan" setting on your thermostat), the motor will continue to slowly circulate air, allowing filters to capture more contaminants.