Bootsy-
It just reconfigures how the computer in the ST acts. Typically, it advances the spark, ups the fuel, removes various limiters and can fix calibration issues. Sometimes, its needed because certain engine/drivetrain modifications are outside the preset parameters of what the stock computer can deal with.
An XCAL is a good first step, but to really get the most of it, other basic modifications (air intake, exhaust) are needed.