Basically, it makes the rear end stiffer, mainly for added weight, added height, more aggressive riding, or any combination. If the rear end bottoms out at all, add more preload.
Here's what the 05 Service Manual says, page 24-6:
ELECTRIC REAR SUSPENSION SPRING PRELOAD ADJUSTMENT SYSTEM
This system adjusts the rear suspension spring preload by operating a hydraulic jacking system that is driven by an electric motor.
The shock absorber and actuator are connected with an oil hose. The piston in the actuator is operated by the control
motor, while the shock absorber piston is operated by hydraulic pressure. The piston stroke is detected by the angle sensor
and the motor is controlled with the control unit (ECU) inside the combination meter.
Preload can be adjusted by operating the “Up” and “Down” switch while monitoring the preload condition on the
multi-display. Two preload settings can be stored and retrieved by operating the memory buttons on the control panel.