I found this in the Technical forum:
Scott Morris:
It gets rid of the Connected /32 route distributed from your PPP peer.
If both sides are sharing the same subnet (which is very typical in today's network) then the /32's showing up doesn't buy much benefit. In the old days with dialup and many disconnected network connections, it was incredibly important to have!
Ricardo Martins:
It is just like Scott said.
If you are using different subnet in both ends you need that command.
Let me just add if you wanna run ospf or other protocol when using different subnets you need to use ip unnumbered off some interface that is under the ospf process for instance.