This module adds a couple of admin reports to review the most common 404 errors on your site.
By default, Drupal handles all requests coming into your website for files that don't exist on the disk. This means that Drupal runs every time someone tries to visit a page that doesn't exist, in order to show your custom 404 page.
More importantly, this also means that Drupal runs every time some other page or email tries to include a missing image, CSS, or other file from your site. And since it misses any caching you might be using, it can result in a high server load on popular sites. This tends to be a problem when moving an existing site into Drupal: it's not uncommon to overlook some directory of images that need to be migrated over because (for example) the existing mailing list templates use them.
There have been many discussions on drupal.org about how to better handle 404s, to prevent Drupal from processing when it doesn't need to. I am of the belief that it's better to let Drupal run, because if Drupal logs the 404s it processes, it is easier to identify the files that need to be migrated and other sites that need to be updated with new URLs. For example, some companies may have a departmental blog running elsewhere in WordPress that includes images from the main Drupal site. Without these logs from Drupal, you might not know that your failure to migrate images has broken someone else's site until they get pretty ticked about it.