The thing with the neck jig is that a neck doesn't bow 100% uniformly. That means that the wood in different part of the neck ´have different qualities depending on how it has grown and thus a short section can bend a bit more and another section can bend less. So when using the fret neck you put the neck under stress to have the same effect as if the strings pulled on the neck, but with the neck adjusted to be straight. Now if the neck has some irregularities in it it would appear a bit "wavy" if looking down the neck (we are talking very small deviations here) and when adjusting the frets you take care of that "waviness" that also will appear when the neck is allowed a small relief. In that way the curve of the fret tops will be closer to an ideal curve.
Not really easy to explain in words, but I hope you get it...
Hey thanks for your response. To clarify:
Ok, so you put the neck in the fret jig and dial in the string tension. That curves the neck. Then, you use the truss rod to straighten the neck back out. At that point, it should be perfectly level, but if there are irregularities in the neck's strength it won't be perfectly level. So you level/dress/crown/etc the frets at that point. Then you release the truss rod, take it out of the jig, put the strings back on (skipping a few steps here..), adjust the truss rod for relief, and you should have no waves due to the varying strengths of different sections of the neck. Is that what it does? Allow you to compensate for the different sections of neck having different strengths?