I want to expand upon this a bit. Answering those questions is a big help when it comes to Google Base understanding your products. When answering these questions, Google is actually including this information on the backend. It is allowing them to better categorize your products, thus ensuring a better user experience. Something else to keep in mind: If Google is asking these questions, it's for a reason. Chances are, you are not providing enough information in your data feed, thus they have questions:)
A real world example I came across in my account last week, I had a product: Little Red Corvette(example)
When I logged in, Base had a note saying they had a few questions about my products.
They are as follows:
In the following text: “Little Red Corvette”
is size = Little ? yes/no
does color = Red? yes/no
does model = Corvette yes/no
What this told me is that I neglected to include the following attributes in my data feed: size, color and model. All I had was the basic info: title, description, link, category, price. Well, I went ahead and added these additional attributes and next thing I knew, my traffic increased, I ended up getting some very nice specific searches in regards to the 3 additional attributes I added.