Clicking on this button (or right-clicking in the text field next to it) displays a dialog box showing the contents of system clipboard.
The clipboard viewer indicates the format of the data found in the system clipboard: XML, Text or Image.
It's possible to switch from XML to Text and, if the text is a well-formed XML fragment, from Text to XML, the latter being useful when you copy XML fragments from a third party application.
 If both the plain text and image formats are available (e.g. MS-Word does this), the clipboard viewer indicates just Text.