Legion and Tali start their spiels which will lead to the annihilation of one of them, but Shepard can cut through it and basically call both of them on their BS.

To get this choice you need a high-ish Reputation, to be a Paragon and to have saved the quarian admiral in the 'shot down' mission on Rannoch (and don't let him commit sucide at the end by by letting him runn over to his men). He backs up your choice, which ultimately tips the balance and allows the quarians to give peace a chance. I think you might also need to have done the geth fighter base mission as well (in the VR world) as that brings Legion onto your side fully and allows Shepard to see the birth of the geth and what the quarians did to make them rebel.