The Repair Disk Function
The Repair Disk function of the Disk Utility program verifies the files stored on the volume and if issues are discovered, fixes them. The function can also fix a variety of directory problems, all except the most severe ones.
Note that Repair Disk is not capable of repairing Mac OS X’s startup disk while Mac is booted from it. To repair the startup disk, boot from your Mac OS X setup disk or any other disk having Mac OS X installed. But if you have Mac OS X 10.4.3 or a later version and you have a startup disk in HFC Plus (Extended) format, then it is possible to verify and repair it while your Mac is booted from it. This is called Live Verification.
The Repair Disk Permissions Function
When you install anything from a package file (having .pkg extension), a file with .bom extension is saved in the receipt of the package and put in /Library/Receipts/. Each of the .bom file includes a list of all the files created and installed by that package and the appropriate permissions for every file.
When you verify disk permissions with Disk Utility, it examines all the .bom files and matches its list with the original permissions each file has. If Disk Utility finds and difference, you can correct (reset) them with the repair feature.
Note that the Repair Disk Permissions function can only verify and repair the permissions of Mac OS X related items and Apple-supplied applications. Any other software installed with Mac OS X installer can not be verified and repaired. Also note that the Repair Disk Permission feature only works with disks having Mac OS X installed on them.
When To Use These Functions?
Repair Disk Permissions
Occasionally in Mac OS X, some key file permissions and ownership get changed. Some of the primary causes of permissions-related problems include software that temporarily alter their file permissions but do not reset later, permissions of system files/folders set during installation, etc. It is also a good idea to run the Repair Disk Permissions function after installing a third-party application that uses an independent installer.
System crashes, power outages are often the primary cause of disk directory/file corruption. When you encounter such a situation, fix these issues with Repair Disk. You should also use Repair Disk if your Mac works abnormally. Ideally you should use this feature as part of your regular maintenance practice to spot out any concealed directory corruption lest it turns into a serious problem. It is also a good idea to run Repair Disk before installing Mac OS X and software.
If you are insterested to know how to use the Repair feature of Disk Utility to fix disk errors, read Using Disk Utility to Verify or Repair Disks.
If your Mac OS X ever starts giving you lot of troubles and you want to re-install it, read How to reinstall Mac OS X to find out how it is done.