This command lets you mount an image at some other location in your local filesystem (rather than on the desktop, i.e. the /Volumes folder). It will prompt you for an image file and a folder, and then it will mount the image inside the folder.
Why would you want to do this? Perhaps you want to reduce desktop clutter. Or maybe you know that another application will be looking for its files in a particular place. Maybe you want to protect some of your files (using an encrypted disk image) and make them available inside your Documents folder.