Upload/Manage FilesUpload/Manage Files
To put this as basic as i can this area is the area that you upload any images to but you must upload them to the correct folder.
So if you were to replace the logo image of your template or any image on your template then you need to click the web template now find your template in the drop down bar, now select the correct folder example like in picture is images.
What ever files or images are all ready in that folder will appear in the list like in the image.
You can use the upload picture feature to add these files or images,