The intermediate codec is an editing-only format used if there is difficulty (or non-support) in using the native format in an NLE. The source footage is converted to the intermediate codec prior to importing. For example, the old Premiere 1.5 would not support native HDV - all HDV files had to be converted to Cineform AVI intermediate files prior to import/editing. Native HDV support was introduced with 2.0 and all newer PPro versions, so intermediates were no longer needed.
Newer versions of NLEs now support most everything nowadays (as the above chart shows), negating the need for intermediates except for realtime editing speed issues. If you have a slow machine that chokes with realtime editing of AVCHD, for instance, encoding an intermediate AVI file may help speed things up.