If you manually update it and upload it, it recycles the app as well, so no big difference there.
There are some situations where it might come in handy. Let's say you wanted to change a setting remotely via the web. Or, you wanted to let a colleague do it, without granting him access to the whole web.config file. It would be handy to have an administration console to do that.
That said, it's not an ideal scenario for a lot of situations. For one thing, the code that makes it possible obviously requires High Trust on the server. It wouldn't work with Medium Trust or lower. That would probably present a problem in a shared hosting environment.
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