The test involves reacting to (usually) words as they appear on-screen by classifying them into categories. The categories are altered to draw out differences in reaction time, which supposedly relate to the difficulty of associating certain concepts with each other.
The idea is that the measure of reaction time makes it particularly difficult to fake, and the association should be detectable even if it is usually over-ridden by the conscious mind.
The IAT has been used for everything from detecting hidden racial prejudices to examining violent associations in psychopaths.
It is still controversial, however, because it is not clear exactly what is being measured, other than some general concept of an ‘association’.
Whether this is predictive of explicit beliefs or attitudes, or future action and risk (such as violence – particularly importantly in forensic psychology) is still an open question.
If you want to try the test yourself, there’s an online version at Project Implicit.