This has the music both imported and downloaded. Looks like it may also contain some more data of some type but it's use is unconfirmed. It also stores information about the songs here. The game seems to strip the ID3 tags from the original music files and place it into a seperate file. So if you play these, niether the filename or the tag will tell you what it is.
<Steam Installation Directory>\Steam\userdata\<Steam User ID>\38900