Basically, it is designed to process the FS2004 folder. However, it is possible to also select FS2002 and even FS2000.
FSX does not accept .DLL files and gauges from versions prior to FS2000. For FS2000 and FS2002 aircraft FSX will display warning messages: you can just accept them.
This tool analyses aircraft.cfg, .mdl and .air files to find all resources required. For instance, it looks at a .mdl file to extract a list of the textures used and verifies if they exist. It also searches for non standard Windows DLL's.
Sometimes there are a lot of unused textures listed in the visual model file. The migration preset (in file.options) deactivates the logging for this particular category.