There is an rc network used in the nfb to couple the output of your amp to the it's input, often times referred to as global fb and the ultralinear/triode circuit as local fb. There are several ways to couple the output to the input like using a differential input section (more popularly known as long tail pair) but the most simple way is to couple it to the cathode of the input tube. Nfb is used to reduce distortion, increasing the resistance in the feedback rc network decreases feedback and vice versa, this is probably what that switch in your amp does.
As what Tony has pointed out, nfb is an incredibly debatable subject. The most popular of all discussions regarding nfb is that it is said to be utterly useless since what would be the purpose of using nfb if it is taken from the output? Hence the question, what is the point of correcting the signal if it has already gone out of the circuit and on to the next stage of the signal chain? (for an amp, the next stage is the speaker)...
Aside from that, effects of nfb on the overall signal has been a never ending battle between different forces in the audiophile community.