Yep, it essentially migrates your old Windows 7 install to a new Windows 7 installation (if that makes sense). Your old applications and settings are all moved over, so it fixes some semi-serious problems. It's not as good as the old XP/Vista repair install as it can't be run from boot - so if Windows is badly damaged and won't boot it won't be any use.
The "Repair your computer" menu from the install CD will perform handy functions such as startup repair, memory tests and system restore - but it can't do a full "repair install" like this