Official comment from the compiz wiki:
Horizontal Virtual Size: The number of columns of viewports you want. For the Desktop Cube to look like a cube, this must be set to 4.
Vertical Virtual Size: The number of rows of viewports you want.
Number of Desktops: Each desktop contains a completely separate set of viewports, so this value
specifies how many complete sets of viewports you want.
Viewports and desktops are not the same concept. For technical reasons, changing the number of "desktops" or "workspaces" in environments such as GNOME, KDE, and Xfce is not the same as changing the number of viewports in Compiz. You can have multiple viewports on one desktop.
IIRC Number of Desktops used to be fixed to 1 in older Ubuntu's.
So... number of desktops can let you can have more than 1 cube on 1 desktop where compiz uses some logic to let you scroll those cubes.
edit: I tried to set Unity up with a cube but cube does not seem to work with Unity. On restart I lost everything except my desktop. Luckily I could start a terminal from a link I had on my desktop (everything else was gone :D) and manually start ccsm.