I use it when I want to read fully comments in the discussion but you haven't have the time to do so at the moment (long comments for instance), or to act as reminder of some todo/asked thing in the discussion.
It's useful also when you create themes, this way you easily have an unread discussion instead of having to ask someone to create a new comment so you have one to check the color scheme.
It adds an option (in the option button) to unread the specific discussion.
That's for discussions (when viewing the discussion list) not specific comments.
It does not reload the whole page, it just change the state of the discussion on the page (hence the x new) is not displayed until after a reload, but depending on your theme, it will change to the correct color for unread discussions.
v1.0 (2011-03-20): Now works again with released vanilla2.
Added the "all new" next to the comment counts.
Removed the confirmation to unread, as it was more annoying than anything else.
Made (hopefully as not tested) the text strings translatable'd.
v0.9 : Cleaned up/corrected the PluginInfo