This basically allows you to store your 4GB + file games on your external when your not playing them. When you're ready to play one of them, swap it to the internal and play it. This is useful for people out there with small internal HDDs, since you can easily move your games to/from internal. Combine this with the PS3 Game Ripper to rip unnecessary videos, and you can effectively manage your space.
Open Backup Manager has this feature built-in, but its nice to manage things from a PC also.
This is an excellent temporary solution until we can use a different filesystem on external drives.