Adding shims to a diff reduces the play between the gears, thus improving gear contact areas and reducing wear. Shims can be added in two areas, to the outside of the bearings in the housing, which eliminates play in between the big ring gear and the pinion.
And they can be added inside the diff cup either behind the spider gears (on the crosspins) which moves the spiders in toward the centre and reduces play and improves tooth contact area, or behind (either, or both) of the larger bevels inside the diff.

To work out if you diff needs shims:
This is easy with ring and pinion gears as you just need to check for sideways play, if theres a little thats fine (you dont want it binding) but if there is an excessive amount then you could shim it. Some people do have problems stripping teeth on these gears.
As for the spider gears, dont worry about it unless you have a problem with them stripping (which I have on my Savage).