It replaces the YouTube player with the standard html5 video player. This alone made my experience on YouTube way better. My connection is slow, so many times I'll just open a YouTube video in a background tab, and leave it loading for a while. With this, I can just preload the whole video. And seeking doesn't make the video reload.
A side bonus, also, is that every video will use the html5 player, so making flash useless on YouTube (one of the few sites that make me keep flash installed). It will also remove the ads, so it might not be your thing for moral/ethical reasons.