The escape function is used in IT systems to indicate a real value of a character in stead of the control function of the character. Example is the < character which means smaller than, but in HTML is also a control character. For more background read wikipedia.
In ABAP code you sometimes need to set a URL with these characters, or build a HTML text. Then you really need to use these rules.
Documentation of the Esacpe function in ABAP can be found in this URL.
Example is the following code:
escape( val = 'IF a < b.'
format = cl_abap_format=>e_xml_text ) ).
The result will be IF a < b. < is in xml replaced by escape character <.
A full list can be found in ABAP program DEMO_ESCAPE. Start the program and select the type you want to check (do select the Show Differences tick box):
Output is now show for the diverse characters: