This is one of my current macro rigs, circa 1989. The Lumiquest softens the light that strikes the subject. This might help: Imagine the actual flash area of a flash unit. What is it, like 1 inch by 3 inches. That's...let's see, 1x3 is 3. Yes, 3 lousy square inches of harsh light. Throw on a difuser like this, and the illumination is now eminating (ooh, fancy!) from at least 5 times the area. So shadows tend to softly wrap around the subject instead of being a harsh contrast.
Only downside is that you lose a lot of light, but if you mate it to a flash of decent output, such as a guide number of 100 or better, and you'll do fine for macro or medium size rooms.