Throughout this stack, I'll be referring to INITs. Technically, an INIT is an executable resource type, but the term has come to refer to either a startup document (type INIT), a Control Panel document (type cdev) or a Chooser document (type RDEV) that contain an INIT resource. This is the definition I'll be using in this document.
INITs were originally provided as a mechanism for adding device drivers to the system. At first, they were directly placed in the system file. Apple finally decided that this was a bad thing, and created a special INIT in the system file, called INIT 31, which looks for files in the system folder that have the types listed above, and executes any INIT resources found in those files. Any INIT that suggests you edit the system file itself is fairly old, and should probably be suspect.
The INIT 31 mechanism that Apple provides requires that the files containing INIT resources reside in the system folder to be executed. FreshStart eases this restriction, allowing you to reduce the number of files in your system folder. See the documentation on system cleanup for more information.