Put simply, Growl lets you know when things happen. Files finished downloading, friends came online, new email has arrived - Growl can let you know when any event occurs with a subtle notification. The rest of the time, Growl stays out of your way.
Along with letting you know when things happen, Growl also gives you full control over how you are notified and what action (if any) you want to take in response to the notification. You can choose to be alerted with a visual indicator or an audible alert, both, or neither. You can choose the type of display that is shown, whether the display remains on the screen, the importance of the notification, and even if the notification should be forwarded to another computer. You can have notifications that trigger an email, run a script, launch a program, or are read out loud.