Basically, this webmaster tools area is a way for you to register domains you own with Google. This gives you the ability to monitor various aspects of your websites.
When I say websites, I’m referring to a domain you purchased and a site running on a server. It will not work with Web 2.0 blogs( at least to my knowledge), such as Blogger, WordPress.com, etc.
The great thing about this service is it will tell you specifically when Google has visited your website and how many pages it has indexed. It goes even further to show you what pages it was having trouble accessing.
Now this new feature I mentioned, Duplicate Content, is a HUGE issue in Google. One of the many things Google will penalize your websites for is Duplicate Content. If it seems too much of it, you are delisted from the search results until you can fix the problems.
Determining what was duplicate content was incredibly difficult. With this new tool on the Google Webmaster Tools page, you can see what is considered duplicate content from an internal standpoint. It tells you exactly where this same content has shown up in both areas, so you can easily remove/change the content to decrease the penalization score with Google.
So, now we have gotten rid of the duplicate content on our websites, we can now rank higher in Google and for possibly more phrases. Higher rankings equal a better chance at gaining more prospects for your sites
and more options equals more money.
I hope I have explained this well enough. This is definitely not the end-all explanation of Google Webmaster Tools. It should suffice for the basics.