There are two types of trades you can perform on the Margin page:
"Isolated" assigns a specific amount of an asset as margin
"Cross" utilizes all positive balances in your dYdX Margin Account as margin
There are certain situations where it is better or worse to use the different modes, depending on your situation.
For starters, Cross trades always modify your account directly, whereas Isolated trades put up some amount of margin-deposit from your account into a new position. When open positions from Isolated trades are closed, funds always go back to your Margin Account where they will continue to earn interest.
With Isolated trades, each position is collateralized independently. The maximum you can lose on any one position is limited by the amount of margin deposit you put up for that specific position. You can have an unlimited number of open positions. Each position will have its own leverage and liquidation price. Higher leverages will require less margin deposit than lower leverages.
Changing the leverage changes the margin requirement of the position, but the size of the position is the same whether you open a 10 ETH position at 2x, 3x, 4x. In this example, at 2x leverage, your position might require 5 ETH as margin deposit, whereas 3x would require 3.33 ETH and for 4x, 2.5 ETH.
Trades using the Cross tab are collateralized using your entire dYdX Margin Account (all of the balances shown under "Margin Account Balances" on the "Balances" page). This allows you to buy or sell any amount in the selected market so long as you maintain a collateral ratio of 125% initial margin / 115% maintenance margin minimum on your account. On dYdX, you can "Sell" assets you do not have, which will cause your balance in those assets to go negative (indicating you have borrowed that asset).
Using the Cross tab allows you to have more fine grained control of the exact trades you make. If your dYdX Account falls below the minimum of 115% collateralization, your entire account will be liquidated until you have no more negative balances (borrows). You are able to borrow and collateralize your account with multiple assets at the same time.
Lastly, the Cross tab allows you to spot trade if you prefer to exchange assets without any margin trading involved.