This object represents a clipping rectangle that the visible part of a display object is viewed through. This is most likely used with a layer object. The layer contents would be drawn off-screen and then that part that falls within the clipping rectangle would be displayed in the window.
This can be useful for performing wipes and making parts of a layer progressively visible within some kind of transition loop.
In the MSIE browser, these rectangular objects are manufactured as needed with the rect() constructor function.