Thomas, Yes, a Deadline is different than the Finish date. Under Task Information/Advanced, you can set a Deadline for a task. If the planned Finish exceeds that Deadline, a red indicator will show in the Indicators field.
The formula above is simply a custom field to show a red flag (or indicator of your choosing) for the Summary Task above the detailed Task that has missed it’s Deadline. This could be useful for seeing where Deadlines are being missed even when the schedule is displayed at a “rolled up” level.
Hope that helps – there are other advantages to using Deadlines, and I seem to remember an MPUG article from some time ago that discussed the advantages of using Deadlines over Constraints.