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What does it do

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It's a key item obtained by a Wi-Fi Event.
It allows you to catch the other Eon pokemon depending on your version.
Latios for Heartgold and Latias for SoulSilver.

If you take it to the Pewter Museum you will trigger a scene with Steven Stone where he explains to you that the Enigma Stone is actually the Soul Dew. After this Lati@s will battle you and will be in the same spot if you are not able to catch it on your first attempt.

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If you have pokemon battle revolution you can buy it for a certain number of pokecoupons and send it( well actually the sould dew) to your game as a mystery gift
I do Sinnoh, but I'm sure LATIAS is on HG, LATIOS on SS.
technically... latios or latias is  a roaming pokemon in kanto in hg and ss