Can someone explain what is the significance of the 'Update the output directory'?

[ambalboa]

I read the manual concerning the solution/Project tab, but I am not understanding what is the significance of this option. I can build a project successfully, and the created files are placed on the output directory, but when should I care what path I write in that field? I noticed that the GUIDs are pointing to the output directory I specified for .Net objects; does this option affect that? Because my .exe file which I created on my machine, runs fine on my machine, but it doesn't work fine on another. The GUIDs are not being regenerated (changed), but the output directory path doesn't exist on the other machine. Could that be why? They are looking for a file on a specified path, in this case the output directory path, which does not exist so it fails to locate the objects which are installed on the machine? The error is "ActiveX component can't create object." I'm thinking it's the output directory path I created. Any comments would be greatly appreciated. Thank you.