Here's a quick demo of a plugin I made : https://dl.dropbox.com/u/1412774/Base32kDemo/index.html
I won't enter in the technical details (they are on the plugin dev thread : http://www.scirra.com/forum/pluginbase32k-unpack-localstorage-spacesaver_topic56155_post350451.html#350451
), but to sum it up : that plugin helps you to store text strings more efficiently on disk
When you have a game with lots of strings (for example a visual novel), using text files or XML files, you can use that plugin to pack the text (on the final user disk, or on your server), and unpack it when needed.
You can also use it to pack base64 image string when you need to save them.