Content of RAM is copied to a location on the hard drive and the PC powers down. IE when you power up again, your PC will be in the same state as when it was put into hibernation.
No problem with using it instead of shutting down, but as you may have noticed, if you don't shut down windows from time to time it can get..... sluggish.
Restarting or turning off the computer clears its memory, so that when Windows next starts, there is nothing unnecessary in memory. Not restarting or turning off the computer can allow junk to build up in memory for whatever reason.
This shouldn't be a problem if you look after your computer properly though
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