It is pretty simple. It lists people I have sent an invite to, but have not registered yet. The feature is a little buggy, one of this friends has registered and still appears in the list without name, but with his profile picture and status.
I used the feature, but I never had a clear impression that it had an effect. What I do and has a clear effect: I block all applications (which other users have installed), which send news to my newsfeed and I do not like. The result: A very clean newsfeed. The only thing I would like get rid of know is the "Most popular items in Network" and similar stuff.