Hi Chris,
When an ASA is configured for proxy ARP, it will respond to ARP requests on behalf of a host for a global address in its configuration, even though it does not technically own that IP address. In other words, if the ASA sees an ARP request for an IP address that is a configured global address, it will respond with its own interface MAC address on behalf of the host it is protecting. As for why this would cause problems for you, we would need to know a bit more about what situations you have had trouble with this.
Here is a link to the command reference for 'sysopt noproxyarp', which also gives a pretty good explanation of what proxy ARP is:
http://www.cisco.com/en/US/docs/security/asa/asa80/command/reference/s8.html#wp1377599
Hope that helps.
-Mike