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The component has the FTP upload facility, which allows you to enter your Google FTP username and password and allow the Plugin upload the feed once per day to Google.
It isnt needed unless your feed is 20mbs or larger (no larger than 1GB). 20mbs is about 30,000 products or more, so in general i wouldn't worry about this.
http://www.google.com/support/merchants/bin/answer.py?answer=160627
The Scheduled process is much more reliable and easier to use, and I would highly recommend you using this process rather than the FTP. You will have less problems, less errors and it is just MUCH easier.
http://www.google.com/support/merchants/bin/answer.py?answer=1219255
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