It appears to realign the axis of the selected bones to the Global axis. So if you rolled a bone so that local Z was down, Ctrl_N will recalculate local Z to the Global up axis.
d’oh… too bad there isn’t a ‘align to 3 joint plane’ (with one axis aimed down bone, another axis is made to lie on the plane formed by 3 joints [wrist, elbow, shoulder or ankle, knee, hip]) so that elbow, knee bends happen as they should.
but someone from another thread showed me a more manual way to set that up.