Needle down holds your stitch line in place and pops the foot up just a little so you can slip your next piece to sew closer to the needle. It is a must for aplique since you wont lose your stitching line.
I use it all the time.
It is also good for free motion quilting as it holds you stitching line instead of jumping a stitch out of line.
It is automatic so you dont have to move the needle yourself