The content on the default page is used when displaying a page which has no content itself.
If the site has two column pages (like this one), then the right and the left columns are 'defaulted' independently of one another. I.e. if there is a page with content defined for the right-hand column but not for the left, then it will only use the default for the left-hand side, and vice-versa.
This can be very useful for example, when you want the same content in one of the columns for each page, such as the navigation menu in the left-hand column on this page. This is defined only once, in the default page.
Default content can also be very useful while building up a new web-site. Write a user-friendly text for pages that have not yet been edited, for example:
"Sorry, this page is not ready yet. Come back soon."
Note that there is a default page for each language used on your web-site, remember to create and publish each one.
Editing the default page is exactly the same as editing any other page. Some of the display may look a bit odd though, for example if you use a 'Page Title' element on your default, this will work OK as a default, but will be blank on your view of the default page, as the default page itself does not have a title.
See