ImageManager is really only necessary if you are using a "Continous Incremental" job. Such a job will, as its name states, generate incrementals indefinitely. The advantage of this technique is that it minimizes I/O traffic to the destination. The disadvantage is that if there is nothing to manage the accumulated image files they can quickly grow into a rather large pile. Therefore, if you are using such a job type, you should run ImageManager and point it at the directory which contains the backup images which are being created by the Continous Incremental backup job and let ImageManager manage those images for you. The most common use case is for a user to configure a Continuous Incremental job to backup to a network share, and to run ImageManager on the actual server which is sharing the directory into which the image files are being saved.
So, what exactly does ImageManager do?
The short answer is that ImageManager intelligently smashes image files together (we call this a collapse or consolidation operation, and sometimes we call the images that ImageManager itself creates, with its collapse operation, "synthetic incrementals" as they aren't created directly by ShadowProtect itself) in order to reduce the number of image files which are stored, as well as the amount of raw data that is being stored. So, which files does it choose to collapse together? Well, you can specify how many days worth of regular incrementals you want to keep around. I think two weeks is the default. For days older than two weeks, ImageManager will automatically collapse all of the image files for each individual day into an end-of-day incremental image file (we call this a "daily collapse" incremental). ImageManager will also create an end-of-week and end-of-month incremental (but in these cases it will not throw away the end-of-day incrementals which are used to create the end-of-week incremetal, or the end-of-week incrementals which are used to generate the end-of-month incremetal, other than the one that is replaced by an end-of-week or end-of-month file which represents exactly the same point-in-time). Hmm... maybe that wasn't such a short answer. Well, I do have a little picture that may help to explain this a bit better (although the picture doesn't show the monthly collapse image files, but it'll help you to get the basic idea). The interesting thing to note though is that ImageManager will keep around at least one incremental for every day on which incrementals were generated, indefinitely, while simultaneously minimizing the path in the chain from any day back to the base image file.