This is a great feature that allows staging all your files from your live site onto your dev site. So basically, don't have to sync any user pics that they might have uploaded for example,
First just to get module on dev site:
drush en stage_file_proxy -y
Then you can just go into the settings.php of the local site, and put:
$conf['stage_file_proxy_origin'] = 'http://prod.development.com:4861/';
/**Usual Drupal stuff under this **/
By adding that line, and pointing at your live site, your local Drupal, with the Stage File Proxy module enabled, will now be able to instantly pull the revised content from the live site, without using old objects or having to redownload everything.