The project, which is garnering some attention on Mozilla's mailing list, is designed to create an application programming interface (API) that's easier to use. Connecting a few dots it would appear that Mozilla is preparing to embed itself everywhere--especially on the mobile front.
As for the technical details, Mozilla notes on its wiki:
The new API has a common C++ layer built on top of the existing API. The new API thus encapsulates many of the complexities of setting up and using XPCOM.
The common layer is then used by platform/toolkit specific APIs. This will allow embedders to use components that fit well into their application, e.g. GTK or Qt widgets.
Having the common layer also makes it a lot easier to add support for additional toolkits as this should only require a relative thin wrapper.
Chris Blizzard outlined some of the key facets of Mozilla's embedding effort in April. He noted how it was imperative that Mozilla had a consistent story and approach for developers that wanted to embed its applications elsewhere.
Additional use cases can be found on Mozilla's wiki. Bottom line: Today Mozilla's embedding use case is one focused on the browser. But as computing increasingly goes mobile Mozilla could have a shot at something bigger.