It can sync your settings (think wallpaper, picture, favorites, browsing history, keyboard/language preferences, etc.) and saved passwords across computers where you use your online account to log in. Can sync your apps too, and since you need an MS Online account to use the app store anyway...

Disadvantages? Ehh... none really, that I can think of, apart from whether you think there are any security risks inherent in having that kind of data sitting in the cloud. You can still use your online account even when you don't have a connection (provided you've logged into the machine before). I just don't find this kind of thing useful, and I'd rather keep my settings and passwords out of the cloud.