Specifically it allows screen mirroring via a wire, so if you have a large screen or something like that, that is a touch screen you can connect your phone it it, and the phones display will show on the screen and you will be able to control the phone via the larger touchscreen.
My specific application for this is, i have a car radio with the ability to do this, and plug my galaxy s4 into it all the time, so i can set the phone down and use the larger 7" screen of the car radio to run my apps and such, it allows for your navigation to show on the car radio screen, if you get a call or need to use hands free it will do that as well, and if you want to stream audio you can do that to. big advantage is, it will charge the phone while you are doing this. The radio can use bluetooth for the phone calls, and for streaming audio, but not for map navigation