The Code Generator/ Wizard can be configured to output different co-ordinate information depending upon the machine tool type:
Output relative to tool depth - the standard output method. The main effect is that arcs that are machined at a different radius will become ellipses and therefore output as a series of feed moves.
Output relative to geometry level (Wrapped radius) - for machines that can store the radius information and output all toolpath data relative to that level. The main effect is that all arc information is output at the Wrapping radius irrespective of tool depth.
Output relative to the unwrapped (Planar) geometry - for machines with controllers that can wrap planar toolpaths directly (all CNC information is output as if Planar mode was active).
For more information on how to select these features, see the Code Generator and Code Wizard documentation.