What is the point of the Windows.old file?

I just recently upgraded my Toshiba Qosmio to Windows 7 from the hellish Vista (I am very pleased with it). However, I am left with a curious little file in my C drive labled windows.old. I tried going in there and going under my user docs to see if anything is left but it deleted all my music, vids, etc (which is ok with me). Now my question, if you cant access your old stuff, what is the point of having the folder in the first place? You cant even run the old programs. As I am typing this question, I am sending the windows.old file to an external hard drive. Should I keep them there? Or should I just delete it? Is it of any use? Please give me the most information you can (even if it helps indirectly). Whoever answers my question well and gives me the most info gets best answer : )