The Normal (Global) template keeps many user preferences such as page
size/margins, fonts, etc. Any new document is opened from normal.dot and
will take on its attributes unless you choose to open a new document from a
different template.

Normal will also store user macros, toolbars and some other (but not all)
preferences. One reason why the FAQ says RENAME it to normal.bad or
normal.old is that you can rescue any important customizations such as
macros and toolbars. Once you are sure that you don't need the old normal,
you can delete it safely.