This policy setting controls whether templates sent with InfoPath 2007 e-mail forms are cached locally.
If you enable this policy setting, InfoPath 2007 does not cache the form template attached to the mail item; instead, it caches the form template from the published location. This requires restricted forms to be published rather than just sent by e-mail. Users can still be sent forms by e-mail, but the form template must be available from the published location.
If you disable or do not configure this policy setting, InfoPath 2007 caches form templates when they are attached to a mail item that is recognized as an InfoPath e-mail form. When users fill out forms that open with a restricted security level, InfoPath uses the cached version of the mailed template, rather than any published version.