Alumina hydrate is a source of aluminum oxide (alumina), essential in stabilizing glaze chemistry and preventing excessive glaze flow. Clay and feldspar are much cheaper sources of the oxide, however, so it is rarely used in glazes. Instead, it is mostly used as a refractory, typically mixed with kaolin to make wadding or kiln wash having high resistance to molten glaze or glass attack.
For more information on alumina hydrate, see the Digitalfire.com Reference Library of ceramic materials.