For example, you want to completely switch over from Fresh Rom to Baked Snack Rom.
Then you would use Titanium Backup, as it backs up all your apps + data. You flash baked snack, and use titanium backup to restore all your apps and data.
Let's just say you want to TRY out Baked Snack. You would use nand to keep an image of your phone when you're switching from Fresh to Baked Snack.
Your apps won't transfer this way, but here you can see whether or not you like Baked Snack. So if you don't like it, you nand restore your Fresh Rom, and bam! Everything's back to the way you left it.
Generally though, people do both because either situation could occur.