Microsoft Knowledge Base Article 296944 contains the following summary:

This article describes how to use file and folder filters for content that is replicated by the File Replication service (FRS).

FRS is a multithreaded, multiple-master replication engine that replaces the LAN Manager Replication (LMREPL) service in Microsoft Windows NT versions 3.x and 4.0. Windows 2000-based domain controllers and servers use FRS to replicate system policies and logon scripts for Windows 2000-based and earlier clients.

FRS can also replicate content between Windows 2000-based servers that host the same fault-tolerant distributed file system (Dfs) roots or child node replicas.