This tab is displayed only when one of the bulk keys described here is used or when the following key is added to the AppSettings section of your web.config file:
<add key="CMSDebugOutput" value="true"/>
On the Debug -> Output tab, you can see the exact output code of recently displayed pages. This is particularly useful in case of AJAX request, whose code can not be viewed as part of the page source directly in the browser.
The log can be cleared using the Clear output log button.