It makes a symoblic link for a file in one subdirectory to a file in another subdirectory. for example, ln -s check/alert/error.php mydir/myError.php
I use it for shortcurts for subdirectories from my home directory. Ex. ln -s main/pages/reports/daily d_reports This way, from my home directory I can directly cd d_reports and it will take me straight to that subdirectory.
Hope this Helps