This is from the help button next to Replacement - you have to use html:
BB Code Replacement
This is the HTML code that replaces the user-entered BB Code. Make sure that you include '{param}' (without the quotes) to insert the text between the opening and closing BB code tags, and '{option}' for the parameter within the BB code tag. You can only use {option} if 'Use Option' is set to yes below.
eg. [ B]My Text[/B ] turns into My Text. To create that tag, enter
<b>{param}</b>
If you were to create a tag like the URL tag, you would use {option}. The URL tag can be used like this:
[ URL]http://www.example.com[/URL ]
which turns into
http://www.example.com/
It can alternatively be used like this:
[ URL="http://www.example.com/"]My Site[/URL ]
which would turn into this:
My Site (http://www.example.com/)
This is actually two different tags with the same code to make it easy on the end-user.
To create the first tag, you would enter
<a href="{param}">{param}</a>
To create the second, you would enter
<a href="{option}">{param}</a>
If you are using options, option is what is entered within the tag, e.g. [ URL="http://www.example.com"]www.example.com[/URL ] in the following:
[url=www.example.com]
{param} is what is entered between tags, e.g. My Site in the following:
[ URL="http://www.example.com"]My Site[/URL ]
You will always use '{param}', but you will only use '{option}' when "Use Option?" is "yes" and you need a second bit of input from the user as in the above example.