It's a networking site. Think about it as being a little like Myspace and Facebook but without all the stupid tunes, photos and privacy issues. There are no applications to run, and you only invite or accept invitations from other business colleagues that you want to connect to.
It maintains an online CV for you (and you can decide how much of it is publicly visible), and to each job you can connect the relevant colleagues that you want to network with. For those jobs you can then ask your colleagues for recommendations, and you can recommend them.
A lot of companies are using it for recruitment as it fits in well with letting them hire a 'known' person that they might not have reached otherwise.
The power of connections is remarkable. The way it works is that there are four levels or degrees of separation (A friend, A friend of a friend, a friend of a friend of a friend, and a F of an F of an F of an F). If you have only 5 connections, and they each have a further 5 at each level, then you are already indirectly connected to hundreds of people. I've connected to at least one or two people from each of my previous roles (and lots from some roles) and am already indirectly connected to thousands of people, all in the same industry etc.
There are tools in place for you to request that a friend introduce you to one of their friends if that person hasn't allowed direct contact.
I quite often put the names of agents or people I'm talking to at potential employers and find that I'm connected to them by no more than one or two 'hops'. I'm not nearly organised enough (or inclined) to follow up through that route but it would be easy to do.
I've been asked for linkedin connections by agents and employers in the last month or so, so it's definately worth a look if anyone is tempted. I was invited into it a couple of years ago and ignored it, and had a few more of those invitation mails from various people and dismissed it as some kind of spam info gathering site or similar, but I was wrong, it IS kosher and it IS useful.
You can join it for a look-see without giving it much info, and can then do searches on some of your mates to get an idea of what can be done.
Noob.