The line means: If party1target exists, cast Lightning Bolt at it, otherwise, cast Lightning Bolt (at my current target). It's equivalent to:

Code:
/cast [target=party1target,exists] Lightning Bolt; Lightning Bolt
Which you used to see a lot.

Oz, you'd probably be better off with:

Code:
/cast [target=party1target,harm,nodead] [] Lightning Bolt