In short, it runs alongside LFS in the background, and adds to the sound mix. Makes engines, brakes sound soooo much better youll wonder how you did without it. Even has realistic gear whineing and transmission shunt noises, backfires, better turbo sounds and all sorts. All changable by you if you want as well.
It added a new dimension to the game when I installed it and you really should give it a go.
Once installed, I recommend a few laps in the single seaters, the FXR, the FZR and the RB4. Youll love it

http://www.lfsforum.com/showthread.php?t=12863 scroll to post 10. Make sure you install the DaveW sound pack too, its way better than the original files.