Simply put, they are layers that are visible on screen as you’re working with your file but won’t print. I use them mainly to create margins that I can snap to with smart guides (that’s a whole other post…) I also use them as a place to hold elements of my art that I’m working with bits and pieces of.  Things to eyedropper and such…

To designate a layer as non-printing is simple – just double click on the layer in the layers panel and in the dialog that comes up, un-check “print”. That’s it. Now the layer will be visible on screen and snappable, but won’t print. To show you that the layer is set to not print, the name is shown in italics in the layers panel. (unless you hide the layer, and then for some reason, it’s not.)

I recommend deleting the margin layer as part of your pre-flight routine to be sure that your pressman doesn’t try to print them by mistake.

You could also use the “template” layer but that locks the layer by default, which means it doesn’t snap, making it less useful as a template…  You might use that functionality if you wanted to place an image that you were tracing, though I don’t know why you wouldn’t just put the image on a lower level and lock the image itself…

I use this almost daily in conjunction with Offset Path to create quick and easy margins.