Lets say you create a Forum, and it got big. One of the members starts stirring up trouble on your site - this person keeps persisting onto creating trouble on your site and you told him many times not to do it. You ban this person. But he comes back and makes a new account, you ban that too. You see this person again under a new account, you're now tired of this person.
What do you do about it? You discourage him to a page of your choosing. The person is redirected to a blank page, or a page you specify in the discourage options.
If he[/she] really makes you that annoyed, you can use the IP discourage. It will block registration from that particular IP.
I use this for all spammers, to prevent them from coming back.