It means that your code should run without any errors or warnings generated if "use strict" and "use warnings" are in effect. Ideally you should h2xs to generate your module template. h2xs automatically puts "use strict" and "use warnings" in your module.

h2xs -A -X -n File::CMP
[download]

(merlyn will surely recognize where I stole that example from...)

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My understanding is that "use warnings" is the prefered usage since its introduction and that -w is depricated (though still well supported). For this reason I've gotten in the habbit of saying "use warnings" instead of -w.