The Incomplete folder keeps one from trying to play a song or movie that has not finished downloading. When finished, the file should automatically move to your shared folder. Only a record of the file should remain in the Inc folder, so LW can keep track of what you've dl'd. Sometimes the complete file remains in the Inc folder (even after being copied to Shared). So you have to clean up the folder every so often. You can also get rid of partial downloads that were cancelled but remain in Inc.

If you Preview a file it will play from a preview copy in the Inc folder. The copies remain in the folder until I go in and delete them; hence I seldom preview.