It is for turning your computer into an access point while at the same time it is connected to a wi-fi router. This way other network devices can connect to your computer and use your internet connection. However honestly I see no point in doing this because if you have a router in your home or office then other network devices can connect to that router as well.
It can be usefull sometimes. I don't have a wireless router at home. The pc is connected by upt cable and there is no need for wireless internet there, only sometimes for the wii. So then you should be able to make an acces point for the wii, since wiis don't accept adhoc, but this works. Unfortunally my wirelesscard doesn't support this feature so I can't use it for the wii
Another thing that came to my mind is when you have a wi-fi router however you are not authorized to connect any more devices to it. In this case you can use Virtual WiFi to connect your other devices to the internet. @Stannieman Sorry to hear you were not able to use it. I didn't know that wireless clients need to support this feature to be able to connect.
i always thought it was a big brother thing that the powers that be could use to spy on us but then, im a bit on the paranoid side