I'm going to stick my neck out here, and somebody can correct me if I'm wrong.
Based on the nozzle diameter, filament diameter, layer height, X/Y motion speed, etc., Creator calculates how fast to run the extruder to push the right amount of filament so you get a certain thickness. This is all done with RATES (with respect to time). The G-code that's sent to the printer has a new X and Y to move to and an amount to extrude along the way. Earlier G-code told the printer how fast to move when doing X/Y (horizontal) moves (say, 100 mm/sec), so the firmware figures out how fast to move X, Y and E (extruder) so that the overall move gets from point a to point b at 100 mm/sec (diagonally) while extruding the right amount of filament along the way.
What the extrusion multiplier does is multiply the amount to extrude during each move by some percentage. If the multiplier is 100%, the amount calculated like above is unchanged. If the multiplier is 90%, each move is given an extrusion amount equal to 90% of the amount calculated above, so the X/Y moves at the same speed (like 100 mm/s above), but the extruder pushes out plastic slower along the whole way, so that only 90% as much plastic is extruded.
The idea is to tune this multiplier to your printer and filament by printing calibration objects.
Let's say you print a hollow 30mm cube with 5mm thick walls. You run the print, then get out your caliper or micrometer and measure the actual thickness of the walls. They'll be close to 5mm because the X/Y motions will be right on (if your pulses per mm are calculated correctly for the steppers, pulleys and belts). But if the printed part is too thick, you can reduce the extrusion multiplier and try again. You want to find a value that gives you accurate dimensions. Too small a value and the filament won't fill the space, you'll get loose strings, cylinders (like those on the MAKE Magazine torture test object) will be "brittle" and have hollow spots, etc. Too large a value and the filament will bulge out and small features will be too thick, or the layers will be taller than you want and the nozzle will clonk into them on rapid moves without extrusion.
A neat way to adjust this in real time is to print from Creator (not the SD card) with the multiplier set to 100% when you slice. There's a dial on the machine control panel that lets you tweak the extrusion multiplier by sending a new value of it to the printer. (The dial is at the far right bottom of the MCP dialog.) If you set this to 50% (like I did once accidentally), you get thin walls where parallel lines don't stick together and cylinders that look like they were eaten out by termites. I had a wall that was four layers thick and it was like four layers of paper instead of a solid wall. If you set this to 150%, I assume you'll get a blobby mess of overextruded yuck. (I haven't accidentally bumped it this way yet!!!) Just bump it, say, 5% at a time and see what you get. If you overdid it, bump it back, say, 2%. The MAKE torture test takes long enough and the quality is affected by the extrusion multiplier enough that you should be able to find a good value in one or two prints.
Sorry for the long missive. And I hope I have this right! At least, the above is what I THINK it does!
I'm quite sure someone will let me know if I'm wrong. (They do that on the road on the way to work all the time, even if I'm not wrong!)