It's more of a novelty than anything. It tracks your listening habits and gives you weekly (and monthly) chart updates of your favorite tracks, artists, albums, etc. There is also a recommendation feature that allows the site to use your listening preferences to recommend other songs or artists or albums you might like based on your listening habits and the listening habits of users with similar tastes to you. I believe they might use a program to do this now... but I haven't used that. I use the (admittedly older) plugin option that streams the song you are listening to directly to their site.
I'm sure it probably does other things as well but I just started using it a while ago because I didn't want to switch music players to use it and it took mC forever to come out with a plugin for it.
EDIT: The group page would have it's own charts too which would be kind of neat because it would allow all the users to see each other's listening habits and what artists/albums/songs are commonly held as good between all of them, etc. Just a thought.