It allows runtime editing of the shaders with the ability to compile the edited shader back into the application. I didn't realize it had this feature until just today; it's going to be VERY helpful when developing Nightmares. Quite frankly I'm sick of tweaking a line of code, putting the shader in a compressed game file, copying these files to the relevant directories(onto another computer, via the LAN no less), launching the game, and then waiting a minute or so while the map loads just to find out that the effect STILL doesn't look right and I have to go through the whole process again! Ahem... anyways:
http://glintercept.nutty.org/Ver0_4/shaderedit.png

There is also a free camera mode so you can fly around the rendered geometry:
http://glintercept.nutty.org/Ver0_4/freecam.png

And there is also a extension/version override so you can see what your game looks like on lower end cards and/or without shader effects.
http://glintercept.nutty.org/Ver0_4/extoverride.png

To use the shader editor with your game you will have to run in windowed mode or use ALT-TAB (assuming your game doesn't crashing doing that...). This app actually gives me a good reason to considering running dual monitors.