\$inner is a reference to the scalar $inner. It allows programmers to change the content of the variable $inner without explicitly mentioning it by name in the source. You can just as well use a different variable and it'll work the same. For example: 
$apples = 10;
$pears = 6;

take_one(\$apples);   # take one apple
take_one(\$pears);    # take one pear

print "I've still got $apples apples and $pears pears.\n";

sub take_one {
    my $ref = shift;  # a reference
    $$ref--           # access the value of the referenced scalar
}

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This prints: 
I've still got 9 apples and 5 pears.

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For more info, check out perlreftut and perlref.

It's easy for a programmer to detect if a value is a reference: just use ref: it'll return an empty string for a normal string, and "SCALAR" for a reference to a scalar.

It's a convention among module authors to use a reference to a scalar if you want to actually use the string value as data, instead of as a file name from which you'll read the contents; for example in the various HTML parsing modules.

In reply to Re^5: Reading a .txt file under 2 levels of compression by bart
in thread Reading a .txt file under 2 levels of compression by LazyIntern

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