Default Does clearing the data from one of the choicesthe Manage Applications-All delete it?

Does clearing the data using CLEAR DATA from one of the choices the Manage Applications then going to ALL delete the application?

Does it uninstall/delete the application completely? Or is it more like a clear browser cache type of clear?

If it does delete, is it possible for me to accidentally delete an essential android system file that I will not be able to recover? (I have no plans of modding or changing roms etc)

For example, the Camera app, if I press CLEAR DATA will it remove it permanently?
What if I accidentally delete something essential?
Thanks.