The term is a bit misleading here. What the Replace command allows you to do is paste additional audio data over existing audio. As an example, you feel like an 'orchestra hit' would add drama to the end of a verse. Normally, if you simply paste the hit into your file, it will push all your existing data to the right of the insertion point. The Replace command allows you to effectively layer the hit onto your audio document without pushing any data aside to fit it in. To do this, you would simply place the cursor at the point where you want to drop in the hit (which is temporarily stored on the Clipboard), then choose 'Replace' from the Edit Menu or Toolbar. It's actually a really cool feature, since you don't have to go back to your original multitrack recording.