This thing, quite frankly, is pretty neat. Essentially, it works like this:
You rough-in a shape using points and edges. (Just regular old geometry here.) No faces or anything, essentially you are just extruding and moving around a bunch of points to form a sort of skeleton. In fact, that is exactly what you are doing: building a skeleton. To this skeleton object, you can add a Skin modifier. What the Skin modifier does is, it encloses your skeleton mesh edges in a "shell" of 4-sided geometry. Almost like... well... a skin. You can select the vertices of your skeleton mesh and scale them (using CTRL-A) to increase or decrease the thickness of the skin mesh generated at that point.
The generated skin is a 4-sided mesh primitive, but you can add a Subdivision Surface modifier after it in the modifier stack to increase mesh detail. (You can't add a Multiresolution modifier, however, and sculpting on the Skin mesh is not supported. In order to do sculpting, you will need to Apply the Skin modifier.)
Now, this is kind of neat, and would certainly facilitate the quick creation of a rough base mesh preparatory to creating a detailed character model. Just rough-in the shape, convert to a mesh, add a multi-res modifier and sculpt away. But another neat feature of the Skin modifier is a button that you can click to convert the base skeleton wireframe to an actual Armature skeleton that can be posed to deform the generated mesh. With a single click, you can generate the character's full skeleton, already assigned to the mesh.
One bonus is that the generated mesh is relatively clean: decent edge loops, and at least passable quality at the joints. Branches get a bit complex, and you might need to do some manual cleanup of those vertices (or you might not; it really does an okay job). You could conceivably even use this technique to generate a low-poly base-mesh for re-topologizing an existing high-poly character. Just drag out points and scale to approximate the shape of the high-poly, apply the Skin modifer, then do some manual re-topo editing using the project to surface and possibly Shrinkwrap capabilities as needed.
I have yet to use it for any official character modeling, but this weekend I'm going to run a character through from start to finish and see how well it fits into the creation pipeline.