What does "Clear Graphics Context" means?
When it is checked, iOS will draw the entire area covered by the object in transparent black before it actually draws the object.
It is rarely needed.
Beginning IOS 5 Development: Exploring the IOS SDK, page 81, paragraph3.
It will apply an OpenGL "clear context" before starting the DrawRect function of the UIView:
glClearColor(0, 0, 0, 0);
glClear(GL_COLOR_BUFFER_BIT);