It's a tool that helps 'trace' a raster image into vector shapes and paths

it's useful for creating vector artwork from raster images - sometimes a logo or icon is only available in a poor resolution raster image, and so having an easy way to convert it into vector saves a ton of time.

I used it yesterday to create an SVG file for CNC plotting of a company logo. It would have taken me a few hours to hand-trace it myself

I don't use it regularly enough to weigh in comprehensively- I use it mostly for processing svg drawings created in other programs for cnc plotting, or for compiling svg drawings onto standardized layouts for sending to a printer

My only complaint with inkscape is that it's a bit slow with rendering complex shapes/canvases with many points, but otherwise it does everything I need from a vector program.