The very first thing you'll want to do when it arrives is to downgrade it to 5.3.1, and jailbreak it. Whether you upgrade it back to 5.3.3 afterwards is your own decision, I personally don't see a need for it.
You can then reboot to diags mode, SSH into it, and make a backup of /dev/mmcblk0p3. That's the partition where user data is kept, including the registration information. You don't necessarily have to back up the other partitions.
About usbnetwork: well, if you know that you want it, then install it. But it sounded like you didn't know why you would want it, so GoSharks' suggestion was completely correct: if you don't know why you'd want it, then you don't need it.
Anyway, it does exactly what you think it does: it gives you a root shell on the Kindle. Which allows you to do whatever you want with the device - including breaking it. All of the modifications that you'll find here have in one way or another required usbnetwork access to the device, in order to be developed in the first place.
More information (but you need to filter it to find the parts that are interesting to you):
https://wiki.mobileread.com/wiki/Kindle_Touch_Hacking