This documentation is not using the current rendering mechanism and is probably outdated. The extension maintainer should switch to the new system. Details on how to use the rendering mechanism can be found here.
The extension adds a folder inside the typo3temp directory that contains several subfolders for the different processes. If you are interested in the naming conventions of the files, you are encouraged to read the source code. Each file inside this folder contains a hash which is created with the md5 algorithm with the original file contents as a source. This is extremely useful, because we can detect changes to script files or stylesheets by a simple comparison and automatically include the current version in the next rendering process.
The scriptmerger registers itself to a hook which is called after clearing of the caches. The registered class simply removes any files inside the mentioned directories above which have an access date that is older than two weeks.