it's an external GPS receiver.
so much more accurate than the one in you phone.
you connect this to your phone via bluetooth and run software such as:
http://www.racechrono.com/
this is the most common one as it free.
then you can download track from their site, and you get trap points lap times and speed logged, which can be overlaid on your video similar to Richo or JP's
this is also how we give real vmax and such not relying on inaccurate speedos.