It's a unit with a strong UV light in it, which sucks water in, passes it in front of the light, and returns it tot he tank.
The UV light breaks down the cells of water-bourne "undesireables" - algae, whitespot and other parasites, bacteria, etc.
Obviously the inlet /outlet is protected so fish can't get sucked in.
And it doesn't affect bacteria in the filter media as they aren't floating about in the water.
However, you often don't need them - good tank maintenance / care/ stocking should mean paraiste outbreaks aren't a concern, and there are other ways to get rid of algae.
They aren't maintenance free, either, as you need to repalced the bulb fairly frequently (I think every 5 months or so), and clean the unit itself.
You still need to do water changes etc as they don't affect nitrate or other chemical nasties.
I got mine becuase of really bad green water, I have discus so was doing lots of water changes, and had plants; I didn't want to do a higher-tec planted tank because was scared of using CO2 in very soft, acidic water with sensitive fish. Also, discus don't really like very bright lighting.