It is a ruffler or gathering foot. The holes at the front of the foot with the numbers on them tell you how tight the gathering stitch is.You can change the density of the stitches by lifting it up and putting the notch into a different hole.The piece of material that remains straight, goes on the bottom and the bit that you are gathering goes on the top.The amount of gather is determined by which hole you have the notch in and when it is finished,you have a gathered flounce attached to a straight piec of material without having to gather and the join.
Hope I haven't rambled too much - I have one of thses and it is a real time saver.
The video is not in English, bur demonstrates clearly how to attach the two pieces.
http://youtu.be/F2Vs0a0poDU