Firewire is a networkable connection. So you can even use it to set up a LAN.
In this case though, when you boot a Mac into Target Disk Mode by holding the 'T' key, you just turn the Mac into a big Firewire enclosure. It allows you to treat the internal drive as an attached drive on another Mac which eases permissions hoops you have to jump through to modify the files contained therein.
R
molṑn labe'
"I am a mortal enemy to arbitrary government and unlimited power. I am naturally very jealous for the rights and liberties of my country, and the least encroachment of those invaluable privileges is apt to make my blood boil."
--Ben Franklin