Wide or Narrow FM (NFM) is about the bandwith the radio is using to broadcast on. Wide, as suspected, takes more bandwith then Narrow and is used to transmit larger portions of data. For speech Narrow is more then sufficient.
Why is this important? Well, if two radio's would communicate with each other on the same PMR channel, but one is broadcasting on Wide and the other on Narrow , things might get ugly:
Picture a small road. The only way to get from A to B is via that small road, but the car you are driving is a big fat Audi Q8 and that road is only broad enough for a Fiat 500. But since you have a lot of HP in your big fat Audi, you still manage to squeeze it through. The only problem is that now your big fat Audi is missing a few centimeters on both sides and at the end of the road you are driving a Q1 instead of a Q8. Also a lot of accidents happened on the roads parallel to the small one you are driving on, due to the debri scraping of your big fat Audi.
This is what happens if a Wide transmitter is trying to get through on a Narrow receiver. The road in this example is the space of the channel. The car is the sound and the accidents are the channels on both sides of the broadcasting one. The receiving end will hear an amplified and somewhat distorted sound and even the channels next to the broadcasting channel will be able to pick fragments of the broadcast up (this is called splatter).
"Well", you say, "Why don't you broaden the road then? I want to drive my big fat Audi! It is my given birth right!"
And now were getting to center. Listen carefully: PMR channels are not wide enough for your big fat surrogate d*ck. It is clocking up the channel space, leaving no room for other users to manoeuvre.
If you want still want to drive that Q8, go drive on LPD channels. They have double the channel space (25 kHz vs. 12.5 kHz and are more suitable for it.
To check if you have the correct settings on you PMR channels:
Turn on your radio
Select a PMR channel
If you see a "N" on the top of the screen you have the correct setting. If not: go change it!
Please note: when your radio is in Channel Mode, you can not change the bandwith for a given channel. The only way to do that, is to change it in the channels settings . Via Chirp that is easy peay. Manually it is that much of hassle that I do not bother to explain.
PMR channels are Narrow (NFM).
Make sure you radio is programmed as such (see this page if you don't know how)
The Narrower the merrier, more people can join the party
LPD channels can be used for Wide.