Usually it is used it to move a Layer around after it has been placed.
This changes the area of your image that is affected by other tools or actions to be within the defined shape.
Holding the [Shift] key while dragging your selection, restricts the shape to a perfect square.
Holding the [Alt] key while dragging sets the center of the rectangle to where your cursor began.
It is also used on layer masks for showing or hiding parts of the image. (Advanced)
If you’re on a Layer, it will erase the information with a transparent. If you are on the background layer, it will erase with whichever secondary color you have selected.
You can get to this tool at any time whilst using any other tool by pressing and holding the Space bar.