The intended purpose of the testing repo is to provide a staging area for packages to be placed prior to acceptance into the main repos. Package maintainers (and general users) can then access these testing packages to make sure that there are no problems integrating the new package. Once a package has been tested and no errors are found, the package can then be moved to the primary repos.
Not all packages need to go through this testing process, however all packages destined for [core] MUST go to testing first.
Packages that can affect many packages (such as perl or python) should be tested as well. Testing can also be used for large collections of packages such as GNOME and KDE.
WARNING: Developers should keep testing packages on their system for testing purposes only. If you leave testing packages on your system while doing normal daily package maintenance, you run the risk of providing packages that have linking/run-time dependencies on those testing packages. Make sure to use 'namcap' on your packages since it should catch most of these issues.