Well it's a proper amp simulator. I pick an amp (say a nice Mesa Boogie) and then I pick a cab (ranges from small practice amps to huge 4x12s), set the gain and EQ levels, then I go straight into my recording interface.
If I was doing gigs then I would use a real amp. The POD does a very good job though. A lot of qualified audio people haven't been able to tell the difference between my POD and an amp.