It's just not required if you are going to be running the standard PAL-I system. And yes you just delete everthing between the #ifdev/#endif or just make sure you do not have the "flag" defined (see below)
The -D<flag> options just set the two flags NZTVCHANNELS and NICAMSTEROMODE which means that the code that lays between the #ifdef <flag> and #endif will be included when compiled. As you are running in PAL-I you probably don't need to do anything other than change the channel frequencies (and you can use either the Australian or the NewZealand channels as a basis for this).
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