The dashboard is a plugin, so you can activate or deactivate it according to your taste and needs. You can use it as your private portal to activity: in the dashboard you can add widgets that you don't have in the activity page. Only the owner can see it and through a number of widgets he can collect informations both from within the site and from external sources. Using Elgg's powerful API sistem, it is possible to build widgets that pull out relevant content from within an Elgg powered site as well as grab information from third party sources such as Twitter or Flickr (providing those widgets exist).

A users dashboard is not the same as their profile, whereas the profile is for consumption by others, the dashboard is a space for users to use for their own needs.