I'd strongly recommend in general that if the controller says something you aren't familiar with, don't hesitate to ask for clarification. There is no such thing as a stupid question, stupid emergency or stupid request for assistance. Especially when you're airborne.
One thing I'd stress that will help the controllers help you, is they call traffic, you reply traffic in sight and they respond maintain visual separation from that traffic. Please respond "will maintain visual separation from that traffic/aircraft type". Please don't say I won't hit em or something to that effect. If you do, I can't really use visual separation. If you want to look like the most awesome aviator on the radios in that situation, reply traffic in sight and will maintain visual separation. You've said less than the first way and all the controller has to do is say approved as requested. That'll make you a controllers best friend. Actually, if you do that they'll probably assume you're a controller and bend over backwards to shortcut you, because to my knowledge, that exchange is only found in our controller guide book.