It allows you to ping (notify) a site of your post. So if you reference some material that is from another site you can insert their site URL in the Trackback box and they will be pinged/notified of your mention/post. However, both sites must have Trackbacks enabled for this to work.
Even though Trackbacks are a way of providing credit to different sources I still do not encourage and remove all copyrighted content from threads. It is still illegal to copy someone's content and paste it here word for word without expressed consent. Nevertheless, that's the intention of the trackback feature -- to notify the referenced site. Of course, they get misused just like any other linking strategy.
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