Yes, the command updates the URL attribute. That command converts an absolute path to a relative one by removing the D:\MyFolder\ prefix on paths like D:\MyFolder\abc\xyz.txt to be just abc\xyz.txt -- if the .urd file is in D:\MyFolder, UR will handle the relative path abc\xyz.txt automatically so that it won't have to be changed if the .urd file and linked files in that folder or subfolder are moved.
http://www.kinook.com/UltraRecall/Ma...ronization.htm
If you actually want to replace one absolute path with a different absolute path, use something like the next command (Change all URLs...) to do the replacement:
UPDATE ItemAttribute SET Value = 'c:\currentuser' || substr(Value, 10, 2000) WHERE AttributeID = 996 AND Value LIKE 'c:\olduser%';