Spangle, i assume that you are talking about hte IMAGES and the box that says "Dont reference locally" I could not find anything like that in the ADMIN Settings. The closest was this and I want people to be able to UPLOAD photos, so if I turn this off... they will need a URL to post a photo?
Advanced Insert Image Popup - Enable
Enabling this option will turn on the Advanced Insert Image Dialog, which will allow users to insert images from the computer, or retrieve images referenced from a URL and store them locally. Disabling this option will display the legacy from URL attachment dialog.