I see this script in alot of websites, what does it do?

<script type="text/JavaScript">
[I]<!--
function MM_preloadImages() { //v3.0
var d=document; if(d.images){ if(!d.MM_p) d.MM_p=new Array();
var i,j=d.MM_p.length,a=MM_preloadImages.arguments; for(i=0; i<a.length; i++)
if (a[i].indexOf("#")!=0){ d.MM_p[j]=new Image; d.MM_p[j++].src=a[i];}}
}

function MM_findObj(n, d) { //v4.01
var p,i,x; if(!d) d=document; if((p=n.indexOf("?"))>0&&parent.frames.length) {
d=parent.frames[n.substring(p+1)].document; n=n.substring(0,p);}
if(!(x=d[n])&&d.all) x=d.all[n]; for (i=0;!x&&i<d.forms.length;i++) x=d.forms[i][n];
for(i=0;!x&&d.layers&&i<d.layers.length;i++) x=MM_findObj(n,d.layers[i].document);
if(!x && d.getElementById) x=d.getElementById(n); return x;
}

function MM_nbGroup(event, grpName) { //v6.0
var i,img,nbArr,args=MM_nbGroup.arguments;
if (event == "init" && args.length > 2) {
if ((img = MM_findObj(args[2])) != null && !img.MM_init) {
img.MM_init = true; img.MM_up = args[3]; img.MM_dn = img.src;
if ((nbArr = document[grpName]) == null) nbArr = document[grpName] = new Array();
nbArr[nbArr.length] = img;
for (i=4; i < args.length-1; i+=2) if ((img = MM_findObj(args[i])) != null) {
if (!img.MM_up) img.MM_up = img.src;
img.src = img.MM_dn = args[i+1];
nbArr[nbArr.length] = img;
} }
} else if (event == "over") {
document.MM_nbOver = nbArr = new Array();
for (i=1; i < args.length-1; i+=3) if ((img = MM_findObj(args[i])) != null) {
if (!img.MM_up) img.MM_up = img.src;
img.src = (img.MM_dn && args[i+2]) ? args[i+2] : ((args[i+1])? args[i+1] : img.MM_up);
nbArr[nbArr.length] = img;
}
} else if (event == "out" ) {
for (i=0; i < document.MM_nbOver.length; i++) {
img = document.MM_nbOver[i]; img.src = (img.MM_dn) ? img.MM_dn : img.MM_up; }
} else if (event == "down") {
nbArr = document[grpName];
if (nbArr)
for (i=0; i < nbArr.length; i++) { img=nbArr[i]; img.src = img.MM_up; img.MM_dn = 0; }
document[grpName] = nbArr = new Array();
for (i=2; i < args.length-1; i+=2) if ((img = MM_findObj(args)) != null) {
if (!img.MM_up) img.MM_up = img.src;
img.src = img.MM_dn = (args[i+1])? args[i+1] : img.MM_up;
nbArr[nbArr.length] = img;
} }
}
//-->
</script>

I think these are JS functions Dreamweaver adds

MM_preloadImages - Pre-Loads rollover iamges so you don't have to wait for them to load when you mouseover.

The rest I'm not so sure of.

I think the rest is just excessive code added by Dreamweaver to create the rollover effect.

Whenever I've come across it in a site I'm working on I usually remove all of the Dreamweaver code and replace it with a few lines of simpler javascript to preload the images and add the rollover effect. I've never noticed a difference in the functionality of the sites before and after the change. I'm just left with a smaller file with cleaner code.