It is my understanding that they have several uses . . . when "ripping" CD's into mp3 (encoding) they tell iTunes which tracks to encode and which to SKIP. When in Library/play mode, I believe that they simply tell the "repeat" and/or "shuffle" features which songs to play and which song to skip ... I think it allows you to put a song in a particular play list but still independently turn it 'on' or 'off' (you might like the song but not feel in the mood to listen to it TODAY). Something like that. Just experiment and you'll see...