These are the parameters that control hotspots and falloff (not applicable to Omni lights):
Hotspot: Adjusts the angle of a light's cone. You can also adjust hotspot and falloff angles in a spotlight viewport (looking at the scene from the point of view of the spotlight).
Falloff: Adjusts the angle of a light's falloff.
Show Cone: Turns display of the cone on or off. Note that the cone is always visible when a light is selected, so clearing this check box has no apparent effect until you deselect the light.
Overshoot: When Overshoot is set, the light casts light in all directions but casts shadows only within its falloff cone.
Circle/Rectangle: Determines the shape of the falloff and hotspot areas. Set Circle when you want a standard, circular light. Set Rectangle when you want a rectangular beam of light, such as that cast through a window or doorway.
Asp: Sets the aspect ratio for the rectangular light beam. The projection parameter Bitmap Fit lets you make the aspect ratio match a specified bitmap.
A wireframe outline of the light's cone appears. The hotspot region is outlined in light blue, and the falloff region is outlined in dark gray.
The cone is always visible while the light is selected.
Tip: The hotspot and falloff borders are not visible in shaded viewports. Use the cone values to adjust hotspot and falloff in the viewport. Render the scene to see the full effect of the light's border.
By default, 3DS MAX constrains the falloff value always to be at least two degrees or two units greater than the hotspot value. The size of this constraint is a preference that you can change in the Rendering panel of the Preferences dialog. The falloff value can range from 0 to 10,000 units.
When the hotspot and falloff values are equal, the light casts a hard-edged beam.
The shape of the light’s cone changes to reflect the shape you chose.
The Bitmap Fit button is another way to set the aspect ratio. It is mainly for use with projections.
The Projector and Assign controls are also for setting up projections. The Overshoot control is mainly for use when the light casts shadows.