When you are using "Compare parameter" (the event), you just have to entre the index of the parameter (0, or 1 or 2, or whatever parameter you want to compare to something).
So if you set Index to 0, comparison to Equal, and Value to 1 for exemple, the condition will be true if the First parameter (it's zero based..) is equal to 1
Function.Param(Index) however is the value of the parameter itself, which can be use in various ways inside the function (like inside a math formula, or to pick a particular instance of an object, or to return a particular result)
In theory you could compare the value of a parameter by using System>Compare Two Values : Function.Param(0) is equal 1