Generated content is content that is automatically generated for the page and is used on multiple pages in the site. Generated content most commonly contains items like menus, advertisements, teasers, etc. In the Busy Noggin QuickSite the user stores generated content in SysFolders.
Which SysFolders are used are controlled by constants originally set within the skin's constants file. However, these constants can be reset for different sections of the page tree so that you can have different generated content for different parts of the site.
You will often find yourself needing to use TypoScript to create content for the generated content areas. In particular, you will need to create local menus for sections of the site. There is an very useful extension called "TypoScript Code" which allows you to enter TypoScript into a content element. This extension is already installed in the QuickSite. If you look into the "Generated Content 1" SysFolder, you will see a local menu created with this extension.
It can also be used to pulls random ads, teasers, etc. Basically it gives you the power of TypoScript in a content element.