Executive Summary: it's a proper keystroke indicator for producing video tutorials.
If you're doing a video tutorial you often need to make it clear which keys you're hitting. Most Mac programs allow chording of modifier keys to modify mouse operations (e.g. pressing down command-option after starting a drag in Finder creates an alias). Sometimes you forget to say what you're doing, and this is where it's nice to have your keystrokes visually indicated.
There are a huge number of "screencast" applications out there, notably Screenflow, Screenflick, and IShowU. None of these will display a keystroke that doesn't include a non-modifier key (like "A"). So, if you're holding down option to rotate the view (in a 3d app, say) your viewer will be clueless as to what you're up to.
This is where KeyReveal comes in. Right-click on its global floating window to configure it.