I am using the Click function n sikuli and when I click on the png image and select Matching Preview, it displays whatever I have on my desktop. Isn't the Matching Preview supposed to display the button that I'm trying to click?

Matching preview is supposed to display what you have on screen, with areas matching the pattern covered by red overlay. That shows you what you get with such matching settings.

Like this:
http://i68.tinypic.com/2h6db7t.jpg
(first match has different color)

If you don't see any areas covered by red overlay, that means that Sikuli doesn't see any match on current screen. If you see several, like on my picture, that means that several areas matches, and if you want only one match you have to play with pattern and similarity to get one match.

Thank you very much for responding:)
Pls look at my script below.

I don't see any areas covered in red. When I click on Find(Setup)->Matching Preview..it shows me my desktop. It doesn't show me the Setup button.
When I click on Target Offset..it shows me the Setup button.
I noticed that the png in Find(Setup) is different than the png in Click(Setup)

What am I doing wrong? Thank you.

find(Pattern("1471447653278.png").similar(0.76))
wait(5)
click(Pattern("1471448707420.png").similar(0.86))

find(Pattern("1471457295602.png").targetOffset(4,0)) ---->I'm finding the Setup button here

click("1471457321576.png") ------>I'm clicking the Setup button here

wait(1)

find(Pattern("1471524359924.png").targetOffset(9,1))

click(Pattern("1471374949255.png").targetOffset(-31,15))

Ok it worked! Thank you very much! :)