Hi Chad,
We provided two different ways to set the value of Output Parameters for your workflow because different people found it intuitive in different ways.
Option 1: Use Assign Token Values
The "Use the Assign Token Values activity to set the values of output parameters" checkbox is checked. The workflow will create blank tokens for each of your Output Parameters. It's up to you to add Assign Token Values activities to your workflow, select the Output Parameter token you want to modify, and set its value in that activity.
Advantage: You can set the value conditionally and update it at multiple points in your workflow (say, in two different branches).
Disadvantage: You have Assign Token Value activities cluttering your workflow and you have to manually add them.
Option 2: Set the Output Parameter values in the Input/Output Parameters dialog
When the "Use the Assign Token Values activity to set the values of output parameters" is cleared, an additional column is shown in the Output Parameters section of the dialog. This Output Value column can be used to set the value of each Output Parameter. Any token created in your workflow is available for use as a value (effectively, this process is happening at the very end of your workflow).
Advantage: Your workflow is cleaner and all output parameter values are configured in the same place.
Disadvantage: Each output parameter is constrained to have a specific value and can't easily be updated based on how your workflow has run.
You mentioned that you want to set the Output Parameters using a Script activity. Either of the above options will work, but in both cases you'll want your Script activity to create tokens with the values that your script retrieved/generated/whatever. You'll then use the Script activity's tokens in one of two places:
Option 1: The "New value" section of a modified token item in an Assign Token Value activity. This sounds like what you're doing already.
Option 2: The "Output Value" column in the Input/Output Parameters dialog.
If no tokens are listed for your Script activity in the token menu, see Mike Wu's response to make sure you are creating them correctly. I also recommend using the Run Workflow feature to test your workflow as it creates two tabs that'll be helpful to you: Tokens and Parameters.