It's basically a tone knob (like what's on a guitar) that you can control with your foot. By rocking it back and forth, it's kind of like turning the tone knob on your guitar back and forth. The wah pedal offer's a lot more sweep than a tone knob though, but it's the same concept.

The button under the pedal turns it on and off.

Listen to Jimi Hendrix's Voodoo Child (or most of Hendrix for that matter), he uses it all over that song.