UV deformation mode allows you to deform your model only for the sake of altering how UVs are mapped on it. That means, for example, if you had a character and you wanted more texture pixels on the head proportionally to the body, you could then scale up the head before going into paint. You can also smooth out parts and such to control the uv maps representation of the polygons a bit more.
Another attempt to explain: You know that Sculptris generates UVs itself (unless you already have a UVmap and want to keep it). The UV deformation mode would allow you alter your model only for this automatic UV map creation process without affecting the actual sculpture itself.
I hope that helped?! ...reminds me that I should do some 3d modeling again, too, at some point.