If set, post won't show on friends views or your main page (not inserted into hints table). Also, if you set it when editing an old post (if you forgot to set it when posting originally), then it'll delete the row from the hints table, so it'll be removed from friends views (which is what the user would expect).
Client authors ... want to add this? The full update web page has it.
(this has been a very commonly requested feature)