Looking inside this folder, I found that it contained three dated folders, for the past three days. (For example, 2012-03-01.) Inside this folder were a number of files, and since on one shared project we use a standard versioning system, I was able to see that there were subsequent versions of these files, with names indicating that they had been deleted.
All in all, I recovered 8 GB that day, because there were two projects where people had change a lot of files. On a desktop Mac, this won't usually make much of a difference, but if you have a MacBook Air, in particular, without much disk space, you may suddenly find yourself out of room. So, if you see a sudden decrease in disk space, you can check this folder. If you use Terminal you know how to get there; if not, you can open it from the Finder. Choose Go > Go to Folder, and enter ~/Dropbox/.dropbox.cache (assuming that your Dropbox folder is at the default location at the top level of your home folder; change the path if it is not). You can delete the folders with no worry of losing files.