Right now we don't provide any description on file formatters that are provided by hook_file_formatter_info. There are quite a few that exist in manage file display and right now you have to turn them on to see how they work since we don't describe them.
Oembed does provide descriptions:
<?php
/**
* Implements hook_file_formatter_info().
*/
function oembed_file_formatter_info() {
$formatters['oembed'] = array(
'label' => t('oEmbed'),
'default settings' => array('width' => '560', 'height' => '340', 'wmode' => ''),
'view callback' => 'oembed_file_formatter_view',
'settings callback' => 'oembed_file_formatter_oembed_settings',
'description' => t('All-purpose oEmbed formatter.'),
);
$formatters['oembed_thumbnail'] = array(
'label' => t('oEmbed thumbnail'),
'default settings' => array('width' => '180', 'height' => ''),
'view callback' => 'oembed_file_formatter_view',
'settings callback' => 'oembed_file_formatter_oembed_thumbnail_settings',
'description' => t('oEmbed thumbnail media.'),
);
return $formatters;
}
?>

Comments
Comment #1
devin carlson commentedA patch to provide description text for all of the core field (file) formatters.
I also noticed that File entity isn't passing along the description text for file and image field formatters to file entity's file pseudo-field formatters.
Comment #2
devin carlson commentedAn updated patch to use
hook_field_formatter_info_alter()instead offile_entity_file_formatter_info_alter().Comment #3
willyk commentedI reviewed and implemented the above patch #2062355-3: Provide description text for all file formatters and it works as outlined.
Comment #4
dave reidCommitted #2 with a couple tweaks to the logic to 7.x-2.x. Thanks everyone! http://drupalcode.org/project/file_entity.git/commit/4ea70a2