Basically it's a different version of the warlock spell Corruption, it does a certain amount of damage over time. What's different about this spell is that it has its own, built in finishing move. When the target has sustained 1044 total damage, whether it's from Seed of Corruption, other spells you cast, or spells other players do, the seed "goes off" and inflicts all hostile targets within 15 yards with a one-time shadow damage spell. This spell will kind of chain react with other seeds, so if you cast it on, say, 4 targets, the first one exploding will contribute to the other targets exploding. Finally, I can't throw this and Corruption on the same target. Which is sort of a bummer, really.
This spell is incredibly useful in a few different situations. The spell does, at a minimum, about the same damage/mana as Corruption on a single target. When there are multiple close-packed targets, the efficiency really starts to shine. For the downsides, read on.