This directory houses all of the public files that browsers/users need to be able to access freely. Node does not process these using the request/response model; in fact, they are just freely given when requested.
You tell Node to do this on line 52 of app.js:
app.use(express.static(path.join(__dirname, 'public'))); These files are called 'static' files to reflect the fact that Node doesn't process them and they are given to the browser as is.
When you add a frontend dependency using bower (i.e., bower install bootstrap --save), bower will create a directory called public/lib and add the dependency files there. You will still have to add a <link rel="stylesheet" type="text/css" href=""> or <script type="text/javascript"></script> tag to your app/views/layout.jade