Used to mark where children of instances of this component will be placed. To fully understand this concept it's important to understand node hierarchies. Visual nodes can be placed in a hierarchy which will cause them to be layouted and drawn appropriately. To learn how layouts work, take a look at the Layout lesson in Noodl.
Any instance of a component that have a Component Children placed in its heirarchy will be able to have children. These children will appear as though they were inserted at the location of the Component Children node.
So if an instance of a component with the visual heirarchy above would have child nodes they would be inserted as the first children of the Main Screen group.