It's more of a documentation process than anything else... It uses the TOSEC naming conventions, I believe... and TOSEC is designed to document all of the versions of games floating around the Internet.
(Totally made up) example:
Okay, let's say Fairlight released a version of Super Mario Uberl33t Brothers for the SNES in 1994. It gets downloaded, played, etc.
Crystal also has a Super Mario Uberl33t release. They both release the game with a cracktro (those lil demos in front of the game that advertises the cracking group)
Years go by, and user X sees that a SNES emulator is out, and people are hungry for games for it. He thinks, "Hey, I have the Fairlight release of Super Mario Uberl33t that I'd bet people want!" and uploads it to the newsgroups. In turn, it is downloaded and put up on HTTP sites and FTP sites.
User Y does the same thing, and again, it is distributed throughout the Internet. This time with the Crystal release.
User Z hates cracktros, so he redumps the ROM and sends it out.
User A sector edits the game so it says "Super Jimmy Uberl33t Brohams" and uploads it. Unfortunately, he corrupts the ROM in the process and it only works up to level 3.
Not to mention Schmentendo releases Japanese, Spanish, German, French, Portuguese, and Itallian language versions of the game. They all eventually find their way to the Intarweb.
Whammo. Ten different releases, each with different checksums, (one of which doesn't work), all floating around the 'net. Along comes TOSEC, grabs the checksum of each, and makes verification files.
(Un)fortunately, there are folks out there who like to distribute whole sets from every corner of Cyberspace. This means you get three good ROMs, one from Jimmy and a ton of foreign language dumps that, if you are solely an English speaker, are next to worthless.
However, if you snag a file called "SMUL", run it though a TOSEC compatible tool or Good Tools, it'll tell you what you have.
All Good Tools does is document what is out there. I have seen "pure" floods on Usenet on occasion.
Good luck!
APf