its basically a storage container for ubuntu which downloades programs/drivers/settings anything that is software based is saved in. The files that are not in the casper drive are either the live cd (which would be on a usb in this case) and any personal user created files such as open office documents, pictures and videos. Which means done use up all the free space on your usb with casper or you wont have room to save documents on the drive.
Now, you can install linux onto your flash drive which in turn wouldnt need a casper persistant storage because of how it runs but it renders the usb drive os only usable on the pc that is was installed with.
Thats where casper comes into play because a live usb can be used on many pcs with the same processor as the version you downloaded and casper just brings your programs and settings with you.