The 'Exclude recipients from previous mailings' function is used when you don't want a mailing going to certain individuals who were sent a previous mailing. For example, if you sent out a mailing to an individual segment and decided after that you wanted to send out that same mailing to everyone in your list. You could choose to exclude the recipients from the previous mailing that went to the segment and the mailing would go out to everyone on your list except the people included in the segment of the previous mailing.
To use this function in a new mailing or an existing draft mailing, click the recipients tab, click 'Choose Mailings' next to the 'Exclude recipients from previous mailing' box. From there, you can choose a mailing or mailings to purge recipients from your new mailing.