It has some disk repair capabilities (although not as well regarded as DiskWarrior's), as well as a bunch of other tests of hardware such as the CPU, video card, RAM, etc. It's got the best surface scan available on the Mac platform, which used to be really useful back in the floppy disk days, but still comes in handy to see whether a hard disk is dying or not.
Basically, if you think something's wrong with your computer, you can go ahead and run it in addition to the Apple Hardware Test to see if it can figure out what the trouble is. If your computer is working fine, you can set it aside for now.