Hi Hari
Activation of records is required for Standard DSO's only, in this process system looks on the existing set of data in DSO active data table and applies the changes it received as new records.
This complete process is further documented in Change log table and can be realized using the field "Record Mode".
Without activation step record level deltas cannot be determined in standard DSO's.
There are many documentation available to explain the significance of record mode, please search them on SCN.
Regards
Ashish