It's typically a sintered stainless stone, like little bbs fused together. It creates tiny bubble when you are adding gas to your beer/wort. I have one I use for O2 when I oxygenate my wort before pitching. I have a few I use to carbonate beers sometimes. The tiny bubbles have more surface area than one big bubble of the same volume would have, so the gas goes into solution faster.
Think aquarium air stone - same thing, but stainless so you can sanitize it.