Originally Posted by scrambledegg81
It's known as a protein rest, and it's more applicable to all-grain brewing, but since the steeping process (for extract brews) is similar, it allows the proteins from the grain to coagulate a bit. (Removing the protein is done during the boil and after cooling, where you skim off the "goop" that tends to group together on the surface...it allows for a cleaner beer in the end.) Search around here for threads regarding protein rest for more info.
I'm not so sure this "protein rest" is really a protein rest at all, but I might be missing something and could be totally wrong.
Regardless, I do know that protein rests are basically not needed for well-modified malt, and almost all the malt we work with nowadays is well-modified. So I don't think you really need to let it rest after steeping if indeed you are accomplishing a protein rest by doing so. Doing a protein rest with well-modified malt can actually be detrimental to the body and head retention of the beer.
I've only done one protein rest ever in all-grain brewing, and that was when I was doing a triple decoction using under-modified malt.
EDIT: Removed the bit about FAN - don't think that part was correct.