It keeps your utorrent from connecting to certain IP-addresses and IP-ranges which are associated with governments, RIAA, MPIAA and similar.

To update the IP Filter, use the desktop shortcut "µpdater"
To enable IP filtering in µTorrent, set "ipfilter.enable" to "true" in µTorrent's Advanced Options.
To reload ipfilter.dat without restarting µTorrent, simply set ipfilter.enable to false, then to true again.
Also you will need to allow wget.exe to access the internet in your firewall rules so it can download the filter list.

To change the location to download your ipfilter.dat from, edit
"%AppData%\uTorrent\IP filter µpdater.bat" with notepad

To uninstall:
just delete these files from %AppData%\uTorrent
ssleay32.dll
wget.exe
IP filter µpdater.bat
libeay32.dll