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This file contains configuration information about your SEQ's hardware - button, LED, and encoder assignments, some low level settings, etc. This file has to be in the root of your SD Card in order for the Wilba Frontpanel to work, because without this file, the SEQ core won't know anything about the buttons and LEDS on your frontpanel.
The MBSEQ_HW.V4 file is actually pretty well self-documented. If you want to understand it, read through the example MBSEQ_HW.V4 files available in this directory in the MIOS Subversion Repository.
If you've just built a MIDIbox and all you want is for your Wilba Frontpanel to work, then you really don't need to understand this file. Here is a standard MBSEQ_HW.V4 file for the Wilba Frontpanel. Just make sure that file exists in your SD Card root.