Need for reference path on project/properties

Question

Sorry, novice question here, but what is the need for the reference path on the project/properties?  I find that I am perfectly able to add assemblies via the 'Add Reference' by right-clicking the reference folder and navigating to the correct directory.  I can do this without having to enter anything onto the project properties.
I am sure that there is a perfectly good reason, but I cant see it at the moment.
Thanks
Paul