It creates some JS to embed into your site. When the page loads, a "related" links section is created linking to news and searches and stuff.
Google Related Links use the power of Google to automatically bring fresh, dynamic and interesting content links to any website. Webmasters can place these units on their site to provide visitors with links to useful information related to the site's content, including relevant news, searches, and pages.
The whole thread at DP is filled with people calling it "AdSense for free" and how this does not benefit the webmasters at all - only Google. Anyone tried it? Does it work well? What's your take?