R1,R2,RE is used to set the bias voltage at the base, and the emitter current for the transistor, while the REcaps are switched in with different values of caps, and resistors, to change the AC gain of the stage variably.
By doing this the DC bias point is not affected.
And if you want the gain to be variable with a single dial, using a mosfet acts as a variable resistance to switch in a cap. to ground the signal, allowing the gain to be increased, the mosfet changes in resistance, as the RV pot. is dialed in.
With a little inginuity, RV. could be replaced with a LDR, or solar battery, a wind generator, a microphone, or any other sensor device, to change gain with respect to an analog input.
A input signal to the base to be amplified, and a continuous variable gain to the stage could make a pretty interesting project.