Here's what Google have to say on their service:
Google Analytics is the enterprise-class web analytics solution that gives you rich insights into your website traffic and marketing effectiveness.
Powerful, flexible and easy-to-use features now let you see and analyze your traffic data in an entirely new way. With Google Analytics, you're more prepared to write better-targeted ads, strengthen your marketing initiatives and create higher converting websites.
Integration of the analytics package into your site is a fairly straightforward task - but the information that it returns is highly useful (and interesting). Find out where your visitors are located, the popularity of pages of your site, where people land & where they leave, keywords used to find you, refering sites and much more