The Navigator displays an overview of the source and destination information, bookmarks, workspace parameters and transformers. In general, it is a hierarchical view of the information in the graphical pane. You can adjust many dataset, feature type and attribute properties from here, as well as directly in the graphical pane.
One advantage to viewing the information in this pane is that if you have a very large workspace, sometimes it is easier to view all the components in list form. You can collapse and expand information much like in a Windows Explorer environment.
You can access functions for all nodes in the Navigator by left clicking on the parameter, and then right-clicking to display a command menu.