Yes, it really does.
There is no reason the average user would ever need to erase free space. Since you're not familiar with what it does, am pretty sure you don't need to do this.
Both Windows and OS X, when you delete a file, the file is not actually deleted, only the pointer that tells the operating system where the file is located. The 'deleted' file is still there on your hard drive until such time as it is overwritten by new data and would be recoverable by most any data recovery software.
Erasing free space writes 0's to the drive, essentially overwriting whatever data was 'deleted', in order to make it un-recoverable.
If you do have a 'need' to do this, you must realize that it is writing 0's to all of the free sapce on the entire drive and should only be done while you are not using the machine. With a large drive, it could take a while to write 0's to the entire disk. Once the process has finished, all the free space will be returned to it's previous free space status.