The state of your files on the remote site is actually stored in a file on the local hard drive. If this file was to become corrupted, then the state would normally have to be initialized, or "caught up". This gives you an alternate option.
If you have a made a backup of your files' state information, this gives you the option to restore it.
Saves a backup of your 'rcfile' - the file XSitecopy uses to store the site definitions.
If you have previously backed up your site configurations, this will restore them.