A key frame allows you to set the position of an object at a point in time.

As you move from one time to another the object will move smoothly between the points you have created. The path that the object follows can be curved – which gives a smooth flow round and into / out of corners, linear which moves in straight lines between points, and stepped which will just jump to the next point when the time comes.

This means better control of your animations - allowing you to create interesting effects more simply.

A tutorial video is available here: http://www.muvizu.com/Video/45306/Key-Frame-Tutorial