This folder holds the media files (images, sounds, videos, PDF documents...). These files can be uploaded through the back-office and included into posts or other pages presented to the user.
This folder has different subfolders for different "file roots". Each of these roots can have different access permissions in the backoffice.
Depending on how you set up
/conf/_advanced.php, this folder may or may not need to be accessed through the web.
A global overview of the codebase can be found here.