The link specified here is used to make the image act as a button. It will override the function of a ´clickable thumbnail´ type image and direct the user to the page specified rather then the larger version of the image.

Use this feature sparingly. If the image is a link it should clearly indicate that - so you do not confuse uour visitors with links that don´t make sense. Also, text links are always better in search engine terms as the engines look at the text used for linking as part of their keyword index for a web site.