A photodiode converts some photons to electricity. The brighter the laser diode is, the higher the voltage is on the PD pin. Don't expect to run a light bulb on this voltage because it is only enough for electronic measurements. Typical 5mW laser pointers will try to put just enough current to the laser diode such that the measured brightness is constant, even when the batteries are dying. There is a way to test thi: when you shine a laser pointer in the lens with another laser pointer, it will lose brightness because the driver thinks there is too much light.
I thought they were used to govern the lasers intensity for both high and low. :-? (this question has been raised a few separate occasions around here with no definite result (except for dx lasers don't need them although some have them), at least to the best of my knowledge).