In normal statistc-view SiDiary calculates the average from all values you've wrote in. If you've select 'A1c-Interpolation' it assumes (depending on the insulin you took) values, that you've not wrote in, but surely where. e.g.: your value was 16 mmol/l at 10:20, you've injected 5 Units of Insulin and at 16:30 your bg is 6,4 mmol/l. Without interpolation the average of this two values is 11,3. But in this long period there were surely values of 14, 10 or 8 mmol/l. Interpolation will add some of this not wrote-down values (Alf will tell you how many), so that your average probably will be shown as 10,9 (all added and divided through 5).
This gives more realistic averages, because your body produces red bloodcells in every second of day. And the hemoglobin of this red bloodcells interact with the actuall bg-level. The HBa1c, your longtime bg-marker, is the result of this interacting.