What does Background Intelligent Transfer Service exactly do?

Solution 1:

BITS transfers files in the background using idle network bandwidth. If the service is disabled, then any applications that depend on BITS, such as Windows Update or MSN Explorer, will be unable to automatically download programs and other information.

Windows Update uses the Background Intelligent Transfer Service (BITS) technology which downloads updates using idle bandwidth. This technology ensures that Windows Update downloads only when no other active download is in progress on the computer. This allows you to smoothly carry on day-to-day activities even while updates are being downloaded in the background. It is not recommended to disable this service.