I think what you are asking is what does the usb storage option do?
When you plug your phone into your PC and the appropriate drivers are installed, you can mount the phone in MTP mode (media transfer protocol) this allows you browse the contents of the internal storage and any MicroSD card without unmounting the storage on the phone. If you enable USB storage and then plug the phone into your PC, the drives will show up as removable storage without the need for any drivers, but the files will no longer be accessible to your phone until you turn off USB storage.