It uses a wavelet compression system like Cineform use.
It is open source. There seems to be a bit of a push for open source codecs for video of late. Two reasons for this. Costs and longevity.
Looking at the list of companies that own IP used in all the mpeg codecs one has to wonder how you could develop a codec that doesn't infringe someone's IP.
What can it do?
The same as any codec, compress video so it uses a smaller file size or lower bitrate. By implementing it in hardware the design of the parts can be tailored specifically to the task rather than using the general purpose CPU in your PC.