We use it to implement a "distributed selection mechanism", which just means that one command uploads the file to a remote server, and another reads it.
The commands can be set using the "URxvt.remote-selection.store" and "URxvt.remote-selection.fetch" resources. The first should read the selection to store from STDIN (always in UTF-8), the second should provide the selection data on STDOUT (also in UTF-8).
The defaults (which are likely useless to you) use rsh and cat:
URxvt.remote-selection.store: rsh ruth 'cat >/tmp/distributed-selection' URxvt.remote-selection.fetch: rsh ruth 'cat /tmp/distributed-selection'