Multiply is the same as the Merge node, only with operation set to multiply by default. It layers images together using the multiply compositing algorithm: AB, A if A<0 and B<0. This algorithm multiplies the pixel channel values but takes the value of A if both A and B are negative. It can be useful for compositing darker values from A with the image of B - dark gray smoke shot against a white background, for example.
It can also be used to add a grain plate to an image regrained with F_ReGrain.