You can configure keyboard shortcuts or use the drop-down menu from the menu bar icon to enter and exit Focus mode for a selected app or Space.
You get a choice of "isolation" effect, with Quiet defaulting to Fade to Black. Focus Out is available as well as Wallpaper, which removes everything off screen apart from the window or space you're focused on and reveals the wallpaper behind.
Where the Fade to Black and Wallpaper modes worked fine, the defocus effect caused some temporary disruption to certain apps, which made it frustrating to use. A warning is displayed up to say that "Focus Out demands a powerful Mac" (Intel integrated video not supported), but you don't get much more powerful than a 2011 top-spec MacBook Pro. That's an option to avoid for most, then.
Quiet will "quiet" certain apps or all supported apps at your preference. Apps such as Adium, iChat and Skype can be selectively suppressed along with Mail and the GrowlHelperApp, which blocks all Growl notifications. Quiet will also set your instant messaging status to DND with the default being "I'm in The Zone."
Whereas other apps, such as HazeOver, quickly isolate windows automatically, Quiet is a heavier, totally manual affair. If that's something you're after, then Quiet will do the job for US$3.99 from the Mac App Store. If you're after something similar for a little less money, check out the free Isolator.