Its purpose is to display media that the other one (the one next to it that looks like a "play" button) won't do. The problem with it is that whatever you embed with it doesn't scale for mobile devices, so it can create something of a nuisance for people on phones. So, please only use it for formats that don't work on the other one.
Sources and formats that it's good for, though, are:
soundcloud.com, promodj.com and some other audio services (not sure which ones)
maps.google.com (maps, panoramas)
picasaweb.google.com (slide show)
It also works with webm, ogv and mp4 video files and oga, ogg, mp3, m4a audio files from web locations (not posted as attachments). Here's an mp4 stored on this site: