The Functional Content consists of items like Menus, Templates, Themes and the like. These are used for DVD authoring (Templates and Menus), Titles (Templates), Themes for "Instant Movie," and probably Styles for Titles.
I'd strongly suggest both downloading and installing this material, as well. I cannot tell you evenything that is included, but can see where just doing a simple Title might be compromised. Even Shapes in the Titler are tied to Styles. If you do not have those (might be in the program installaiton file?), you will pretty much be hosed, with Titles, and will not have the Assets to author to DVD-Video.