The # function introduces a comment. Text following a comment is ignored, up to the first newline. If the last character on the comment line is a backslash, the following line is interpreted as a continuation of the comment, up to the first newline:
# This sed script transforms source files written \ using the troff mm macro library into troff ms source.This sequence has exactly the same effect as the following:
# This sed script transforms source files written # using the troff mm macro library into troff ms source.If the character immediately following the # character is an ``n'', no output will be automatically generated by the script. This construction has the same effect as the -n command line option (see ``Using sed'').