Pretty sure the easiest explanation would be that it renders the scene at a lower resolution, up scales it to the native resolution that the monitor is set to output to then uses sharpening to try and make up for the missing detail with minimal fps loss at the down scaled resolution. Or it lets you use a lower resolution setting while trying to look like it is not, at the same time giving you a bump up in FPS.
If you had a game that was a bit to slow to play properly even at low settings. this might be a help if a few more FPS would make it more playable without looking like your taking a major dive in resolution. and since it is driver level. it can be used in most apps that run in full screen. but even if it is enabled you don't have to use it for everything. just set it up for things it works best for. And best of all, if it is supported it is free.