It's used for simple client/server interactions from the shell. With it, you can do interesting things like take output from one machine, send it over the network to another machine that pipes this input into other commands. Here's an example:
# On the destination machine nc -l -p 2345 | tar xv # On the source machine tar c PATH_TO_FILES > /dev/tcp/IP.OF.DESTINATION/2345Which will tar PATH_TO_FILES, on the source machine and transmit it over the network on port 2345. The destination will receive the data and pipe it into a command that will extract the tar.
This is so useful, I had to jot it down!