Pnminterp scales up pictures, producing output with one NxN pixel for each pixel in the original image. Where pnminterp improves over using pnmscale/pnmenlarge for this is that it interpolates between pixels, producing better-looking output.
The options let you select alternative methods of dealing with the right/bottom edges of the picture. Since the interpolation is done between the top-left corners of the scaled-up pixels, it's not obvious what to do with the right/bottom edges. The default behaviour is to scale those up without interpolation (more precisely, the right edge is only interpolated vertically, and the bottom edge is only interpolated horizontally), but there are two other possibilities, listed below.
interpolate to black at right/bottom edges.
Usually produces fairly ugly output for PBMs. For most PBM input you'll probably want to reduce the `noise' first using something like pnmnlfilt(1).