Note: The changes in the data will be persisted per Session only. The data will be reset next time you visit the page.

The command item feature of Telerik RadGrid is useful when you want to trigger commands directly from buttons/controls residing above the column headers. The visibility of the command item can be customized using the GridTableView.CommandItemDisplay property.
In the first grid from the demo the command item template is used to perform a selection-based editing functionality. When you select several items from the grid you can edit, update or delete them at once. The command buttons also allow you to add new record or refresh the data in the grid.

By default the command item displays Add new record and Refresh link buttons with images.

The RadGrid.ItemCommand event will be fired when a custom command bubbles from the CommandItem, which lets you define custom functionality that can be executed in the ItemCommand handler. Additional major benefit is that all buttons (residing in the CommandItem) will automatically take advantage of the RadGrid AJAX mechanism, without writing any extra code.

Here are some more references concerning the CommandItem features:
Default behavior
Event bubbling
CommandItemTemplate