Subcode is information recorded onto the disc that tells the player various things about the CD playing such as the name of the track, length, postion, etc, pretty much everthing in the table of contents for that disc. It also defines things such as if to allow a digital to digital recording, pre-emphasis, and how many channels are in the recording.
I would imagine that the discrimination output signal is used for error correction regarding how well the device is separating left and right channels. Probably part of a feedback loop.