If you have multiple IP addresses assigned to a machine, you can use it to bind to a particular IP. If you don't, then you don't need to use this option.
If I don't use this option, then MDB's listening to messages on remote queues donot work (in jboss 3.2.2)
ie if I have an MDB deployed on machine A listening to a queue on machine B, then I need to start machine B with the --host=<machine B> option .
Please note that machine B does not have multiple IP addresses.