Multimeter battery test
Some battery chemistries will show a normal voltage under no load (and a multimeter is next to no load - 1 to 10 Mohm) even when they're flat.  The 50 ohm load in battery-test mode is to negate this tendency and give you some indication of whether the battery is holding up to a light load, or is actually completely flat.  If you connect in battery-test mode and its voltage drops as you watch, then yes, that's a flat battery.  Most batteries other than little coin-cells should be able to supply a 50ohm load without sagging.

The voltage limit is probably about the power (Watts) rating of the 50ohm resistor - it'll comfortably handle up to 6V batteries.  Above that, it'll cope for a few seconds, maybe, beyond that all bets are off :).