In conditional formatting, we can set more than one rule to format the cells. If the rules do not conflict with each other, then all is well. But what happens when more than one rule turn TRUE? According to Microsoft website, the earlier rule that turns takes precedence over the latter rules. So if the earlier rule format the cells Red and there comes a second rule that formats the cells Blue, the cell will remain as Red.
Then in this case, what is the purpose of the option Stop IF True?
That option works if you have a different format for the 2 rules. If the earlier rule format the cell Red and the latter rule format the Font colour to Blue, both rules will be applied. This is different from the earlier example when the rules are using the same formatting, change the cells colour. In this example, the 2 rules apply different kind of format (one is cell colour and the other is font colour) and therefore, both are applied. If you do not wish to apply the latter rule, change in font colour when the earlier rule turn TRUE, then check the option STOP IF TRUE on the earlier rule. This will make the conditional formatting stop checking the latter rule and therefore, format font colour will not be applied when the earlier rule (format cell colour) turns TRUE.
For a more detailed explanation, please refer to this write-up on Microsoft website http://office.microsoft.com/en-sg/excel-help/manage-conditional-formatting-rule-precedence-HA010342674.aspx