MCLR=ON means you need to pull MCLR up to Vdd yourself. Your PIC will STOP if you Grounded this pin (regardless what oscillator is used). It should NOT be left floating in this instance. If you were using an Xtal or Resonator as the master clock source, then that oscillator does NOT stop when you ground MCLR, however the PIC is nevertheless prohibited from running.
MCLR=OFF means that MCLR is handled INTERNALLY and that pin can be used for I/O (Input actually). Whatever you do to the pin in this instance will have no bearing on the PIC running or not. It will be just another INPUT pin. You could leave it floating if it was unused.
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