your ps3 and all the ps3's are linked together to standford university. It is generating a medical program that helps scientists computers study medical cells and stuff. only works if u got a net connection. the reason its on ps3's is because ps3's are around 25 more times powerful then a PC.
Your PS3 downloads some work, and does a molecular dynamics simulation of a protein system. The atoms all jiggle around trying to find the final, stable conformation (this is "folding"). Once the process by which each protein folds is understood, it can be controlled -- for instance, to prevent the process that leads to Alzheimer's disease.