This topic has been posted to death, but to answer your question:
Centerline is a traditional way of carving fonts as a vector cut with a v-shaped bit, where the thickness of the line can be changed by the depth of the cut. We want it because it:
1. Looks good (better clarity than is possible with the carving bit, and also, because it uses a v-bit it is possible to carve smaller text than is otherwise possible).
2. Is very fast (because it carves in vector mode rather than in raster mode, it can carve out text in a fraction of the time)