I honestly have no idea what it really does. All I know is that it has the ability to make regular pictures interesting. I have used this technique in yesterday's POTD and today's POTD.HDR stands for high dynamic range, and it is an imaging technique that allows for a greater range in exposure than what would typically be seen. What comes out of all of this processing is an image that has high (or exaggerated) dynamic range.
I still have very little idea what this really means.