The idea is that if you don't care where your room is you can just walk up and get your welcome packet with your KTTW card and leave without having to wait in long lines. You tell them during the online check in process about what time you'll be arriving and they try to have your room assigned. That room may or may not be ready though. Sometimes my room has been ready and sometimes it hasn't and never seems to matter if I do online check in or not. You can still add a room request at any time just by calling CRO and having a CM add it. With online check in there are a couple of things you can check under room preference. I believe it's first floor, close to transportation, a crib, and a fridge. I have done both several times and can't really tell a difference. Sometimes I've gotten my room request and sometimes I haven't and it didn't seem to matter if I did online check in or not. If I haven't, the CM will usually still check to see what's available. Only twice have I had a online check in CM say that if room location is important I should not have done online check in, as it was really designed for people who just wanted to get in and out and they weren't really supposed to take the time to change room assignments (this was at CSR and POFQ). Sometimes the online check in line is alot shorter, but sometimes I've found it longer and they usually only have 1 or 2 CMs working those desks. The last time I did online check in at CSR, the regular check in was alot shorter. It just depends on the time of day and how many people did online check in. My last two trips I did not do online check in, because I wanted to be able to discuss my room preferences if my location request was not granted and I did not want to hear another online check in CM tell me I should have done regular check in if room location was important to me.
Online check in does not affect whether you get your room request or not. If a location is important call now and have the CRO CM add any room requests to your reservation. Supposedly they are looked at and filtered out by request a few days prior to check in.
Just FYI: I go to WDW 4-6 times a year. Sometimes I do online check in and sometimes I don't, but the last couple of trips (Sept and Nov) I did not. I got a great location each time, but was originally placed in the one area I did not want to be. I asked very nicely and the CM at check in moved me to a great location and in Sept she even gave me a free upgrade to a water view, I did not ask for. Last May I did online check in and got about as far as I could be from my requested location and the CM wouldn't even look for another room, telling me I should not have done online check in if room location was important to me.