The New flag allows the DJ to indicate that the song is from a disk that is "new" in the station's collection. It is a simple Yes/No flag that is shown as a checkbox in the playlist entry form.
The New flag is associated with the instance of a song in a playlist, not with the disk itself. So it means: the disk was new (to the station) when it was played in this playlist.
Stations that produce regular Top-30-type charts often include only new material in the chart. For example, if an old disk for some reason gets a lot of spins one week, it is not included in the report to CMJ. The New flag may be used, like the Date added field, to assist in this.
The New flag may be disabled in which case it disappears from the playlist entry form and cannot be used as a search criterion or in report generation.