Balance charging the battery.
In simple terms, it is essentially the mid point between the two cells (in a 2 cell battery) and the charger can use it to see which cell needs charging more to even them up to the same charge state.
Have a play with the top diagram on this site
http://scriptasylum.com/rc_speed/lipo.html as it shows what I've said pictorially (set series to 2S, parallel to 1p and balance connection to yes).