Autosave will create a copy of whatever route you are working on, so if your game crashes and you get one of those "Trainz has encountered a problem and needs to close" messages, the next time you open the game look in the route called "AUTOSAVE" and your route updated will be in there. When the route asks you to "Save", there is a drop down list and you select the name of the route you lost, which will then be overwritten with the autosaved route.
IMO it's best to set Autosave to "every 10 minutes" so the maximum work you can lose is 10 minutes.