#2
It just uses compensated materials (usually the bridge and nut) to have a more accurate overall intonation. Usually on a guitar, if you have the intonation set where open is E and 12th fret is E, there may be a few notes in between that are a few cents off. This just corrects for that.
It is more common on washburn guitars. One of my guitars has it, and I can't notice anything from it all. I guess if I had an ear for perfect pitch, I would notice that on my '62 Danelectro, that my 3rd or 5th fret is off. If you are extremely picky about tuning accuracy, then it may be for you.
BTW-Buzz Feiten System. Buzz Feiten was a man who developed this system.