using only phrases would return the phrase as a payload. Pairs return the value.
If you edit an xmlpayload file you will see two column, value on the left and phrase on the right.
If you have a payload pair, like movies, the value might be the path and filename and the phrase would be the name of the movie.
If you set it to phrases only and say find movie "avatar" then {1} will be equal to "avatar"
If you set it to pairs and say "find movie "avatar" then {1} will be equal to "c:\video\movies\avatar.avi"
You always need to have a phrase in your command. You cannot have a command "avatar" if avatar is in a payload, you need to say "play avatar" etc.
But for channel 1 you can make "channel" the phrase and "1" the payload. Even if you could use payloads by themselves it would probably lead to false commands or other confusion.