If I'm not mistaken I think it just stops the games from finding updates when you boot them. Guess it would come in handy this way you can still have internet access on your PS3 and skip updates. Not 100% on this but just my 2 cents
I think all this does is lets you skip the new patches that comes out for games and still be able to play the game without it signing you off of psn for having an older patch of the game. it enables you to play a game on the PSN on a older patch if the game requires you to be on a newer patch of the game. But that´s what I think.