I think it means the citing of any us patent in the document should be treated as formal incorporation by reference.

Normally a mere reference to material does not convey an intent to incorporate the material by reference. Here it is being specifically stated that such an intent exists.

Please see this website for additional details:

http://www.uspto.gov/web/offices/pac/mpep/documents/appxr_1_...

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Note added at 23 hrs 16 mins (2006-01-15 09:37:39 GMT)
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Incorporation by reference;
(from a different section of the above website)

Incorporation by reference of part of an application in a U.S. patent application publication or a U.S. patent constitutes a special circumstances under 35 U.S.C. 122(a) warranting that access to that part of the original disclosure of the application be granted on petition. The incorporation by reference will be interpreted as a waiver of confidentiality of only that part of the original disclosure as filed, and not the entire application file.

http://www.uspto.gov/web/offices/pac/mpep/documents/0100_103...

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Another citation from the website:

INCORPORATION BY REFERENCE
**>An applicant may incorporate by reference the prior application by including, in the continuation or divisional application-as-filed, an explicit statement that such specifically enumerated prior application or applications are "hereby incorporated by reference." The statement must appear in the specification. See 37 CFR 1.57(b) and MPEP § 608.01(p). The inclusion of this incorporation by reference statement will permit an applicant to amend the continuation or divisional application to include subject matter from the prior application(s), without the need for a petition provided the continuation or divisional application is entitled to a filing date notwithstanding the incorporation by reference. For applications filed prior to September 21, 2004, the incorporation by reference statement may appear in the transmittal letter or in the specification. Note that for applications filed prior to September 21, 2004, if applicants used a former version of the transmittal letter form provided by the USPTO, the incorporation by reference statement could only be relied upon to add inadvertently omitted material to the continuation or divisional application.

http://www.uspto.gov/web/offices/pac/mpep/documents/0200_201...

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I suggest that you explore this website using its index, which is available at:

http://www.uspto.gov/web/offices/pac/mpep/documents/smi.htm