At least in Argentina, from what I've seen from friends hiring them (i didn't cuz i thought it was a waste of money and also i don't trust strangers to give them all my personal data to fill some forms for me), they just handle the same stuff that you can do on your own, basically:

- go to the embassy's web page,

- load all your personal information for the visa application in the web page.

- schedule an interview

- schedule the visit to the CAS (where they take you a photo and your fingerprints).

So, basically, they manage the bureaucratic procedures that happen BEFORE you get to the interview, and give you advice on the documentation you should take with you to prove you are economically rooted to your country (so you won't become an illegal immigrant)...

But you still need to go personally to both the CAS and the Embassy (on 2 different days). So, not really worth it for anyone who knows how to use a webpage.

As far as I know it has to do with documentation, easier scheduling of the interviews for people who live far away from the consulate, as well as some queueing thing.

Clearly I know very little.