Paul,

It is a writer's (most often screenwriter's) tool where one can jump along the storyline writing highlights and plot-points in detail, then fill in later. Its a writers' version of storyboarding.

Lots of options and freedoms. One can attack a different part of the storyline if one gets tired of flogging away at one section. One can try different directions and has the freedom to chuck the tiles later if things don't work or get balled up in a dead end. More than once, a tile or two not fitting the story to hand becomes the inspiration for and gets used in a totally different one.

After you let the juices flow non-linearly (which is very freeing from the assumed constraint a story is written as it is read, linearly) you just paste them together and do the bridgework in between. In screenwriting that initial assembly process gives rise to such notations and acronyms between tiles as ITBH ("insert techno-babble here"; made famous by the initial writers of Star Trek) and TSOSH ("then some other shit happened").

This process also gives you the freedom to explore different arrangements of the storyline; foreshadowing, a completely different entry-point into the story-line than you intended, that sort of thing.

It makes it really easy to just sit and brainstorm with the keyboard, then sort, chuck, arrange, and assemble it after the muse might run its course.