It's Facebook for enterprise. Basically, everyone in your company joins the social network and you have a wall, and can post and follow others and message, etc... My company has it and much like Facebook, I have an ongoing love hate relationship with it.

I'm in a completely remote company of ~65 people, and it's purpose is likely to replace some of the water cooler talk and serendipitous culture that you miss out on in virtual work spaces. I don't think it does this, but I'm also a pretty light user.