If you destroy an enemy capital ship or structure, and you have a capital ship of your own in the gravity well, you earn some money for the destruction. This technology is actually quite expensive to unlock, making it impractical in most situations. It's actually quite good if you're making lots of bombers and regularly knocking out structures, but otherwise you're better off putting your money into trade ports if you want to increase your income. Most of the time if you're causing enough damage to actually profit from this, you're probably going to win anyways because you're dominating the battlefield.
Also, if the thread is more than a year old (lass post was March 2008) please make a new thread rather than bump the old one.