Let's read what the docs say:
Root[{$f_1, f_2 ,\ldots$}, {$k_1, k_2 ,\ldots$}] represents the last coordinate of the exact vector {$a_1, a_2, \ldots$} such that $a_i$ is the $k_i$th root of the polynomial equation $f_i(a_1, \ldots, a_{i-1}, x)=0$.
This, though a bit confusing, is a pretty accurate and straightforward description. Let's assume two functions ($f_1$ and $f_2$), and substitute $i=1$ into the description. Then we can read
... such that $a_1$ is the $k_1$th root of the polynomial equation $f_1(x)=0$.
With your example, this means that
f1 = 327680000000000000 - 1280000000 #1^8 + #1^16 &
f2 = #1 + 25 #2 + 25 #2^5 &
k1 = 7;
k2 = 3;
and
a1 = Root[f1, k1] // N
(* ==> -8.28089 - 8.28089 I *)
Now put in $i=2$, and read the description again:
Root[{$f_1, f_2$}, {$k_1, k_2$}] represents $a_2$ such that $a_2$ is the $k_2$th root of the polynomial equation $f_2(a_1, x) = 0$.
So let's do
a2 = Root[f2[a1, #] &, k2]
(* ==> 0.353233 + 0.353233 I *)
This is indeed the numerical value of your Root object:
N@Root[{f1, f2}, {7, 3}]
(* ==> 0.353233 + 0.353233 I *)
I hope this clarifies the definition of the multi-polynomial Root objects.
Now why would they introduce this? I don't know. I always assumed that Root is not meant for end users to construct directly. It's simply a representation of algebraic numbers that Mathematica's algorithms can work efficiently with. I assume that some algorithms in version 9 can work better with this type of Root object than with the single-polynomial ones.
You can always convert these to a single-polynomial Root object using RootReduce:
RootReduce@Root[{f1, f2}, {7, 3}]
(* ==>
Root[268435456 - 160000000000 #1^8 - 1280000000000 #1^12 +
14593486328125 #1^16 + 296215781250000 #1^20 +
2277618359375000 #1^24 + 10672192343750000 #1^28 +
34709265117187500 #1^32 + 83311708281250000 #1^36 +
152740318515625000 #1^40 + 218200683593750000 #1^44 +
245475769042968750 #1^48 + 218200683593750000 #1^52 +
152740478515625000 #1^56 + 83312988281250000 #1^60 +
34713745117187500 #1^64 + 10681152343750000 #1^68 +
2288818359375000 #1^72 + 305175781250000 #1^76 +
19073486328125 #1^80 &, 46]
*)
Or just use N on them to get a numerical approximation.