Yes it does. You willl need to download software though and it will not work on some ps3 slims. This will be the case for anything with jailbreaking PS3s though.
As for the PS3, it allows, in simplistic terms, to pirate games... As well as access and install linux or other operating systems onto the PS3... There are various other features, but that is it in a nutshell...
and you will only be able to pirate your own games from online if you have a blue ray burner and blank blue ray disks. online play for jail broken systems is virtually nonexistent since logging into playstation network with a jail broken system risks banning and bricking. if you don't know what this is Google it first