it's kind of like digital clay, and digital paints, the new version is finally capable of making art without needing another 3d app to start the process.
it allows a massive level of detail to be sculpted very efficiently, ie gears of war and it's sequel used z brush heavily for all their organic and stone work. they also roughed up the metal work. so z brush did the majority of epic games heavy lifting. it's not something i can really explain though, http://www.pixologic.com/home.php
cruise around here for a while