When you build a project, the various "builders" (the Java compiler is one example of a "builder", there can be others) create many new files within you project's directory structure. For example, the Java compiler created .class files. If you have automatic builds configured (which it is by default in Eclipse), the builder will be run as soon as you save a file that you changed. Often this can lead to undesirable results. A "clean" causes the IDE to delete all of the files that the builder built, this way you can do a fresh build.
A "clean & build" step is as close as you can get to the ideal conditions in an automated build environment, where the source code is checked out from a version control system into an empty directory and then built.