How it works: It's actually an updated implementation of the old "Piles" idea, in that you can have one icon that gives you access to lots of different things. But Apple's Stacks fill another role-- they get icons off of the Desktop for good, and down into the Dock without looking cluttered. For years and years, almost every Desktop on every computer ever has had icons all over it, from apps to various downloads to whatever ended up there. But Leopard is different-- all of its icons aren't spread on the Desktop, they're piled into the Dock. Click them, and they span across the Desktop (or line up in a grid, if you're boring), click them again and they disappear. That's the real innovation here-- now, finally, you can work your way down to a completely empty, icon-free desktop.
Oh, and I should also mention that Stacks aren't just static. Leopard comes with two stacks-- Documents and Downloads, and the Downloads stack will automatically fill out with anything you download from Safari, Mail, or iChat. No more downloading random files to the Desktop and using Expose to let you go find it. Now, just click open the Stack, and get access to everything you need without ever leaving the window you're working in.
Who will use it: Everybody! And Windows users in 2010, too, since it's almost guaranteed that Microsoft is already working on a way to get this into Windows 7.