Basically what it means is that there are only two (2) files needed to boot Fatdog, which is vmlinuz and initrd instead of the usual three (3) (or more): vmlinuz, initrd and base.sfs (puppy.sfs, zdrv.sfs, adrive.sfs etc). The base.sfs file still exists in Fatdog but it is contained within the initrd, thus you can't see it. It also causes initrd's to swell: initrd's size is usually around 3-5 MB but in Fatdog it is about 300 MB because it contains the base.sfs - hence the name "humongous".
Why use humongous inird over Puppy's traditional 3-file setup?
Of course, like anything else, the "faster boot" part depends on your BIOS and your hardware. It is generally faster to use humongous initrd on harddisk frugal install but it isn't always so. Humongous initrd may be slower to boot on other kind of setup / install devices, too (though again, not always). You may have other reasons for preferring the standard 3-file setup:
Fatdog supports converting the humongous initrd back to a small initrd, extracting the base.sfs in the process and reverting to the standard 3-file setup:
If you use last method, please remember to use the basesfs parameter on your bootloader to tell Fatdog where to find the basesfs. Usually setting it to basesfs=local or basesfs=local:/path/to/fd64.sfs will do (or you can specify the actual device location like basesfs=device:sda7:/path/to/fd64.sfs - this will be faster since it means Fatdog doesn't have to search for the basesfs).
Parting words: Will using a small initrd improve boot speed? Perhaps. There is not definite answer. You just need to go a try.
Note: base.sfs is a generic term
for Fatdog's system SFS. The actual filename varies with Fatdog
versions, it is usually called fd64_xxx.sfs
where xxx refers to the version number, e.g. fd64_620.sfs. Starting from Fatdog64 700,
the base sfs is simply named as fd64.sfs;
there is no version number attached anymore.