While executing your scripts you may get some 
UNEXPECTED/UNPREDICTABLE errors. (like printer out of 
paper). To "recover" the test (and continue running) from 
these unexpected errors you use Recovery Scenarios.
Types:
Trigger Event. The event that interrupts your run session. 
For example, a window that may pop up on screen, or a QTP 
run error.
Recovery Operations. The operations to perform to enable 
QTP to continue running the test after the trigger event 
interrupts the run session. For example, clicking an OK 
button in a pop-up window, or restarting Microsoft Windows.
Post-Recovery Test Run Option. The instructions on how QTP 
should proceed after the recovery operations have been 
performed, and from which point in the test QTP should 
continue, if at all. For example, you may want to restart a 
test from the beginning, or skip a step entirely and 
continue with the next step in the test.

On Erro resume Next:
If you can predict that a certain event may happen at a 
specific point in your test or component, it is recommended 
to handle that event directly within your test or component 
by adding steps such as If statements or optional steps 
or "on error resume next", rather than depending on a 
recovery scenario. Using Recovery Scenarios may result in 
unusually slow performance of your tests.They are designed 
to handle a more generic set of unpredictable events which 
CANNOT be handled programmatically.
For Example:
A recovery scenario can handle a printer error by clicking 
the default button in the Printer Error message box.
You cannot handle this error directly in your test or 
component, since you cannot know at what point the network 
will return the printer error. You could try to handle this 
event in your test or component by adding an If statement 
immediately after the step that sent a file to the printer, 
but if the network takes time to return the printer error, 
your test or component may have progressed several steps 
before the error is displayed. Therefore, for this type of 
event, only a recovery scenario can handle it.
I would not go into details of how to create files and how 
to define them since they are fully covered in QTP 
Documentation. Mercury QuickTest Professional User's Guide 
> Working with Advanced Testing Features > Defining and 
Using Recovery Scenarios >