Tasker is what one might call a "mega-utility." It is so powerful and has so many features and settings that an attempt to write about them all would yield a review thousands of pages long. Suffice it to say that Tasker gives you an incredible about of control over how your phone works, through automation.
The way Tasker works, essentially, is in simple "If X then Y" equations. That's the only simple thing about it, but here's an example. Say you're tired of your GPS draining your phone's battery. You don't want to leave it on all the time, but it's also a pain to manually turn it on every time you open Maps, and turn it off again every time you close Maps. With Tasker, you can automate the process so that every time Maps opens, your GPS turns on, and when you close Maps, GPS turns off, and you never even have to look at settings or press an extra button. Very slick.
Tasker works by having you set the "First Context" (the X), and then the Action (the Y). Under the First Context menu, you can chose Application, Time, Day, Location, (phone) State, and Event. So many options are available under each of those menus that it's mind-boggling. Under the Action menu, the categories are Alter, App, Audio, Dialog, Display, Encryption, File, Media, Misc, Net, Phone, Plugin, Tasker, Variable, and 3rd Party, again with a remarkable number of choices under each.
Here are just a few examples of things you could do: Have you music's volume go lower when you plug in your headset, send an automatic SMS to the last person who called (useful for when you're driving), turn the phone to silent when it's face down, create the ultimate personalized alarm, have your ringer automatically turn off when you get to work...and that's just the frost on the tip of the iceberg. Take the developer's tour for more ideas. You can also download Tasks other people have made.
Negatives: This is not an entry-level application. You can figure it out with some dedication, but it certainly isn't intuitive for someone new to the world of smartphones (though I suppose that's not this app's core demographic, anyway). Also, you can't do much in terms of controlling the settings in other apps. In other words, I can have my Profiles app load when the phone boots, but I can't tell it which profile to load. Finally, having Tasker constantly running in the background will naturally use some system resources and battery power, but it seems to be a very small amount.
The bottom line: Tasker is a utility on steroids. It provides far more options for automation than any other app on the Market, and it is well worth the price ($6.16 at this writing).