Supposedly they mask your IP address. Not being computer literate, I have no idea how VPN works so I am asking peeps here to see if anybody has used it before and whether it works like it's supposed to, is it worth the money etc.
It's just another mechanism to proxy traffic through an encrypted intermediary. Benefits depend on what you're trying to do. I have a server hosted in a data center so there's a VPN to treat it like having direct, private connectivity except over a shared medium like the Internet. That was why VPN was developed in the first place.
Otherwise people of varying conspiracy theory enthusiasm put traffic on a third-party hosted VPN and feel very pleased with themselves for questionable benefits. Some people use it to circumvent geographical content restrictions.