Analog Simulation is a way of emulating the output of digital audio through an analog system. This way, you can better analyze your audio's "real-life" output versus just what the digital sample values are. Technically, the technique is called "oversampling", and it re-samples the audio at 4x or 8x the original sampling rate in order to simulate the analog circuitry's interpretation of the digital sample values it is given.
This can be very useful in finding the real output values of your mix or master, where you may not see any clips in the digital realm, but may get very different results in the analog realm. Analog Simulation helps with this.
You can utilize Analog Simulation in your analyses to determine "real-life" peak levels, RMS levels, etc, just as with any other analysis. You can even use an Action to auto-normalize your content based on the output of the Analog Simulation instead of just the digital analysis.