The Function Discovery Provider Host service allows resources to be discovered over the network. One of the more notable resources that depend on this is the Media Center Extender (an XBOX that can play media from your computer), but it can also be used to discover networked cameras, printers, disks, etc. If you are fine with manually setting these items up you may be able to get away with disabling this service, but since the default setting is ‘manual’, you probably won’t save any resources, so you might as well leave it alone.