A wildcard DNS record is a type of "blanket" setting for subdomains that have not been created in the 1&1 Control Panel. For instance, when a subdomain is created in the 1&1 Control Panel, there are standard DNS settings applied to that subdomain automatically. You can later update or customize these DNS settings in the 1&1 Control Panel. For any subdomain that has not been created in the 1&1 Control Panel, it might be assumed that no DNS settings are set. This is true for all but domains residing in a server package.
For domains residing in a server package, there is a wildcard A record set for every domain. This means that even subdomains which have not been created in the 1&1 Control Panel will still automatically use the "parent" domain's A record (IP address), thanks to the wildcard A record.
This is convenient in cases of a reseller-type environment, where you may offer your visitors or customers the ability to host their own blog or site as a subdomain of your own domain, such as with Wordpress Mutltisite (MPMU). Normally you would have to manually create each subdomain in the 1&1 Control Panel, so that the subdomain would be assigned the default DNS settings and work properly. With the wildcard A record set, there is no need to create each subdomain manually. Instead you simply allow your website platform (such as Wordpress Multisite) to recognize the subdomain used, and load the correct website.
Because the wildcard A record is only set for domains residing in server packages, platforms such as Wordpress Multisite will not operate properly on a standard hosting package.