what exactly is this for?

And its super useful for situations like leading in blocks, parties of 3, any situation where making an anchor out of the rope doesn't work so well. Also great for clipping into rappels. I've tried the purcell prusik and didn't like it. The adjustability wasn't as good, it can slip occasionally, and is actually more difficult to adjust.

The idea is to avoid the daisy chain problem (see http://www.youtube.com/watch?v=Be17lI-rVyU). And for that it works well - all the loops are full strength, unlike a daisy chain. That said, it's still a static anchor connection, which is dangerous. If you get hit by rockfall or are precariously balanced above your anchor, this is not particularly safe. I highly recommend you look into tying yourself a Prussel Prusik, which is both more useful and safer.

You can use this daisy chain like you would a regular old sling to tie into an anchor station or belay. This just gives you different lengths to choose to clip into opposed to just one on say a 60cm sling.