I think it is only a visual aid to see where the parts are used etc... I use the flat at times to check the "Short List" or rather summarized list of all the components..
I use the Select & Replace to rename the components.. Also Pack & Go in a different folder, I go C:\User\.. \Documents and save my PG there..
Just a question for one who doesn't use nested P&G very much. Does it try to re-create the file folder structure that the files are already in, or a new folder structure based on what assemblies the parts are in? Or does it do something else?