The goal is to let people accept bitcoins as if they were USD. An example is the easiest way to explain this so here it is:
Situation:: A consumer has bitcoins but wants to pay USD to a website.
The website would contain a button that transfers the consumer to the exchange (along with the USD expected and the websites account info). The exchange creates a transaction between the consumer and people who want bitcoins for USD and gives them the websites account info.*
This system would allow website owners to accept bitcoins without trusting them. For the consumer it is as easy as paypal.
*If the website denies that they received the USD, it is extremely difficult to work out who owes who. This could be solved if the exchange accepts the money & the bitcoins, then sends it to who it is owed.