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You might need section 245(i) if you:

Entered the U.S. without being inspected by an INS official.
Stayed in the U.S. longer than allowed by INS.
Entered the U.S. as a worker on an aircraft or ship (crewman).
Entered the U.S. as a "Transit Without Visa."
Failed to continuously maintain a lawful status since your entry into the US.
Worked in the U.S. without INS permission.
Entered as an "S" nonimmigrant (relates to witnesses about criminal or terrorism matters).
Are seeking a work-related visa and are out of status at the time of filing the application to adjust status (Form I-485).
Worked in the U.S. while being an "unauthorized alien."

Saberkitty, I still believe that most of the people who will have been granted waivers for the status situations you listed above are those whose situation RESULTED from the INS's backlog in paperwork. Their official okay by the INS for them to remain in the country didn't come through in a timely fashion, and their status lapsed from legal to illegal.

I may well have to call my Congressman to check this out if you continue to insist I have it wrong, but that is my honest understanding of this policy, which has been in effect for some time, and is simply being renewed.

Saberkitty, I still believe that most of the people who will have been granted waivers for the status situations you listed above are those whose situation RESULTED from the INS's backlog in paperwork. Their official okay by the INS for them to remain in the country didn't come through in a timely fashion, and their status lapsed from legal to illegal.

No, those folks you refer to are eligible for other subsections of Section 245 of the Immigration and Naturalization Code. No one has a beef with legal immigrants who are cought up in red tape and bureaucratic snafus through no fault of their own.
"Entered the U.S. without being inspected by an INS official," means came into the country illegally. That's not a snafu, that's willful disregard for our laws.
Marine Inspector and Ajnin work with the Border Patrol. They will confirm this definition of "entering without inspection."

I may well have to call my Congressman to check this out if you continue to insist I have it wrong, but that is my honest understanding of this policy, which has been in effect for some time, and is simply being renewed.

By all means, call... but call with more than questions, call with answers of your own. There is a great deal of spin and disinformation coming out of DC on this Section 245(i), which is part of Clinton's INS Legacy.
For yet more confirmation, here are some links to pro-Illegal sites...

Many potential immigrants are aware of the section 245(i) legalization program that expired on April 30, 2000. Basically, the law provided that a foreign national who was in the US on December 21, 2000 and who has a family member or employer to sponsor them, can petition for and be granted Lawful Permanent Residence ("Green Card") even though they were out of status (illegal) at the time they filed their petition.
American-Immigration.com
Most people who entered the U.S. without inspection, overstayed an admission, acted in violation of the terms of their status, worked without authorization, entered as a crewman, or were admitted in transit without a visa, are considered out of status
American Immigrant Lawyers Association
Congress had enacted a new law which temporarily restores Section 245(i) of the Immigration and Nationality Act that was signed into law by President Clinton on November 26, 1997.
Section 245(i) allows certain individuals who are in the U.S. and who are not in lawful status but who are eligible for an immigrant visa to file their paperwork for immigrant visas here in the U.S.
Frosina.org
Section 245(i) is the law that gives almost all applicants for permanent residence, including undocumented immigrants, the right to be interviewed here. By being interviewed here, out-of-status applicants avoid the three and ten year bars to permanent residence. So long as you have a relative petition, employment petition, or a labor certificate application pending by the January 14, 1998 deadline, you'll be interviewed here regardless of the wait in your quota category.
For instance, suppose you came here without papers and your permanent resident mother files a family petition for you before the cutoff...
Immigration Answers

There's plenty more like them. Just run a Google Search on "Section 245(i)" and start clicking around. You'll quickly find that people who are both for and against Illegals both agree that Section 245(i) is there to allow Illegals to do an end-around our laws and "change status" to legal.

I may well have to call my Congressman to check this out if you continue to insist I have it wrong, but that is my honest understanding of this policy, which has been in effect for some time, and is simply being renewed.

Section 245(i) was enacted in 1994 and repealed in 1998. President Clinton extended it for four months when he left office in 2000.

Section 245 of the INA (Immigration and Nationality Act) deals with the adjustment of status of aliens from a non-resident to a resident. Subsection (i) deals with illegal aliens adjusting their status of as an illegal non-resident to a legal resident.

Call your Congressman, your understanding is wrong