The Web is full of snoopers, spyware, and people who want to steal your private information. IP Privacy can help protect you against them by helping you surf anonymously--that is, hiding your IP address and other personal information that Web sites can gather about you.
The program does this primarily by configuring your browsers to use anonymous proxy servers. Your browser essentially browses the Web by way of those servers, which hides your identity as you surf. IP Privacy finds the servers for you, tests to see that they're working, and then sets your browsers to use those proxy servers.
The technically minded can do this themselves, without use of software, by fiddling with various settings. This software isn't for them. Instead, it's for those who worry about their privacy, but aren't technically proficient enough to set up proxies themselves.