After installing Mountain Lion, if you have a compatible Mac, you will see an icon in the menu bar at the top of the screen. If you have an Apple TV (second or third generation), you can click on the screen and see the Mac's desktop on your television monitor.
Since I have Amazon Prime, Windows (via bootcamp/VMwareFusion) Media Center, and Slingbox, it is very convenient to just start a video and show it on a bigger monitor.
In addition to mirroring the desktop, an audio signal is also sent to the Apple TV. While I don't believe it supports surround sound at this time, it is better than having to plug the Mac into a receiver.
Also, I was unable to find a way to send the signal from the second display. If that was possible, it would be a great feature for working on a computer while streaming Slingbox to another monitor.
Anyway, I still love the feature, even if there are a few tweaks I would like to see. It definitely made the $20 on Mountain Lion a worthwhile expenditure!