it loads all of the items in the room before users enter. It's very helpful for those who lag easily when entering a room filled with items.
Example:
Joe enters a room without preload. Joe has to stand still and wait for each individual item to try to load at the exact same time. Joe eventually is booted from the room for lagging.
Jane enters a room with preload enabled. She has to wait for the room to load before she enters so each item has time to load. She enters the fully loaded room and is able to hang out with her friends without lagging.
It's kind of hard to explain. It doesn't do much for the room owner, but it makes a huge difference for everyone else.