If my understanding servers me correctly, it just boots up your NT4 in 16-color VGA mode. Perhaps just in case you mess up with screen resolution, refresh rate or swap monitors.
joohang basically hit it on the head. It boots you up in 16 colors @ 640x480, to help you diagnose video-related hardware troubles. NT unfortunately does not have any full "safe mode," VGA mode is about as close as you get.
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