Basically, that is where you'd put any php code that you may do in your island. To give a small example:

PHP Code

/* PHP CODE HERE */ 
$mymath = 2 + 2;

/* BODY HERE */ 
$body = <<<EOF
My 2 + 2 math equals $mymath
EOF;


So, what you'd see in the island is:

My 2 + 2 math equals 4