Below is an excerpt taken from following url. Hope it helps.
http://office.microsoft.com/en-us/assistance/HP010030691033.aspx
This feature requires you to be using a Microsoft Exchange Server e-mail
account in Cached Exchange Mode.
When using an Exchange server e-mail account with the Use Cached Exchange
Mode option selected, Outlook provides a better experience by using a copy of
your mailbox that is stored on your computer. In addition to the local copy
of your mailbox, Cached Exchange Mode optimizes the type and amount of data
sent over a connection with the server. If On Slow Connections Download
Headers Only is selected, Outlook will automatically change the type and
amount of data sent over the connection.
For example, you may use a laptop computer at your office and connect via a
network cable to your corporate local area network (LAN). You have access to
headers and full items, including attachments. You have quick access to the
computer running Exchange server. If you disconnect the laptop from the LAN,
Outlook switches to Trying to connect status. You can continue to work
uninterrupted with your data. If the connection remains unavailable, Outlook
switches to Disconnected, periodically checking for server availability. If
you have wireless access, Outlook could reestablish a connection to the
server and switch back to Connected status. You aren't required to change any
setting or restart Outlook.
Later, working remotely, you use a modem for dial-up access to your Exchange
server. Outlook recognizes your connection is slow and automatically
optimizes for that connection by downloading only headers and doesn't update
the Offline Address Book. Additional optimizations are made to reduce the
amount of data sent over the connection.
By offering different levels of optimization, Outlook can adapt to changing
connection environments, such as when you disconnect from a corporate local
area network (LAN), go offline, and then reestablish a connection to the
server via a slower dial-up connection. As your Exchange server connection
type changes — LAN, wireless, cellular, GPRS, offline — transitions are
seamless and never require changing settings or restarting Outlook.
