What exactly is “INDEXing” a drive?

About a month ago, I posted a question about undoing and accidental indexing of my Win 7 laptops hard-drive…I’ve been ill for the last year and am just now getting around to undoing my stupidity…but I was wondering….what exactly does indexing do to files, folders and document…I mean I even lost my Internet Explorer icons, and my Accessories folder!!!….