into your .css or .js and it knows to look there for the images you want to use to override the normal images.
This helps segregate TEMPLATE images from content images like you'd find in /images.
And because its in the url folder it will never be overwritten by update JB templates. Sadly we can't do the same thing with HTML overrides but thats a different topic.
Hope this helps others. And remember BACKUP YOUR WORK!.