It's just a little loop to go through all file names and replace any spaces with nothing.
IMHO, that would make the filenames pretty hard to read. You might be better off replacing all spaces with underscores. Those are back ticks ( ` ) and not single quotes ( ' )
Like this.....
Code:
for i in * ; do j=`echo $i | sed -e "s/ /_/g"`; mv "$i" "$j"; done