What is a symlink?
More properly a symbolic link, it’s a pointer from one location on the file system (in UNIX or Linux) to another. It’s like a magic tunnel that lets a set of files in one directory pretend that they also live in other directories without having to make a bunch of copies of them.
Why would you symlink WordPress core?
The thing about having a bunch of WordPress environments for development, testing and staging is that when you update your version of WordPress you wind up copying WordPress core files around a lot. Copy, copy, copy – waiting for a deploy to happen is tedious and a great opportunity to get all distracted on Twitter or something.
There is also a lot more risk of winding up with a corrupted WordPress install when you are doing lots of copying, should the network or file system have a failure during this lengthy process. Changing a symlink is nearly instantaneous and much less risky.
I can’t take credit for this clever idea; I heard about it from a WordCamp talk by Rami Sayer.