It's a place where you set up what they call a "lens", which is pretty much like a one-page website. You choose a domain name that comes AFTER the squidoo portion of the URL. You can put affiliate links, etc on the "lens" and many lenses have really good content. You might want to go there and check out the site.
I didn't have much luck with Squidoo. You can't earn any serious money with it, but you can get some easy backlinks and some traffic.
For money it cannot be that huge but Yes squidoo lens do help in SERP's too. My lens http://www.squidoo.com/domains_forums/ helps me get my pages deep linked Total earnings = $1.xx!