Norton Internet Security 2010 - System Optimization - How does it work?

First, I just upgraded from NIS 2009 and I am extremely impressed with how smooth it went using the Upgrade Tool.  Symantec really did an amazing job starting with 2009 and again with 2010 and I'm very glad that I came back to using Norton products. No more bloat and the SONAR system is fantastic.

 

So my question here is can someone explain exactly what the System Optimizer does and how it works?  Does it defragment my entire system or just the boot sector?  Does it work on specific applications' files?  If anyone could give me a better idea of what it does exactly I would very much appreciate it!