Sorry for the delay, I'm not really familliar with the WordPress forum/support thing.
Yes, the plugin is just downloading images.
It read your DB for attachments entries you have and if you don't have the file corresponding, it will try to download it from the URL you specified.
Here's an example of use. You want to start developping on an ongoing project. You checkout the code locally but not the "uploads" folder. If you use a VCS like Git, Mercurial or SVN, you normally don't versionned the "uploads" folder cause it is too heavy. So you also dump the DB from your production site that contain entries for attachments. The only thing is missing are the image files and it's where the plugin is useful.
When you're developping, maybe other contents has been added to the production site with images. To update your developpement site, you'll dump the DB and import it to your local site but again, images are missing. The plugin will retrieve them.
This plugin is maybe more adapted to a certain way of sites developpement.
I hope I answer your question and thanks for your interest.