in a nut shell, it highlights area's of the image that are hitting focus when you are in manual focus (i think the depth of the highlighting also gives and idea of depth of field too). its good in most cases but sometimes doesnt show up to well, but since i've started to experiment with older film lenses on a M42 screw thread its a god send really.
you can change the highlight colour in the menu system, ive also heard that people when shooting in raw change the creative style to b&w and the focus peeking shows up more. plus then it comes to processing afterwards the raw file still holds the colour information of the image, so with a few adjustments its back to full colour.
i suppose for completeness for anyone in the future reading this, focus peeking feature is on the line up of A37/57/58/65/77/99 camera's and i think all the NEX camera's too.
