The Windows clipboard can contain different 'types' of content. For example it may be pure text or an image or various other formats. PasteAsFile looks at the type of content on the clipboard and then lets you paste into any folder on your hard drive.
PasteAsFile will also allow you to change the format when you paste the information. This is very useful when you want to convert from a PNG to JPG or perhaps some text on the clipboard to a PDF file to email to someone else.
When pasting as HTML format the resultant HTML file will retain the original formatting (as well as possible). This again is very useful when you want to retain table formatting or other formatting from the HTML.