As with all open tunings, when the guitar is strummed without fretting any of the strings the respective tunings chord is sounded, in this case a D major chord is sounded. This means that any major chord can be easily created using one finger, fretting all the strings at once on that particular fret.
Open D tuning is very popular with slide guitar (or 'bottleneck') players. It can also used in regular (non-slide) guitar playing. The full and vibrant sound it produces - particularly on an acoustic guitar - also makes it ideal for fingerstyle playing.
A number of artists have used this tuning, Elmore James used this tuning heavily other arttists include Neil Young, Richie Havens, Joni Mitchell, Bruce Cockburn, and Barry Gibb. Stone Gossard from Pearl Jam uses this tuning when playing the rhythm guitar on "Even Flow" and "Oceans", from their Ten album.