It allows one of those cheap and nasty plug-in mains transformer type PSU to be used as the power source for a +5v regulated PSU thats suitable for powering PIC, TTL/CMOS logic and other circuits.
Because there's no direct electrical connection to the mains, it's perfectly safe for beginners to create. You can also throw one of these together for less than £2.00
If anybody in the UK is interested, I've got a couple of blank, etched and drilled PCBs that I'll give away on a first come, first served bases. All I ask is for £1.00 to cover my postage and packing costs. All you need to find are the 13 components to assemble the thing.