The gray-scale sensor is a composition of a photocell (light-controlled variable resistor) and a integrated white LED on board aiming just front of the sensor. With this sensor you can measure ambient light directly from voltage using Analog read pin on your Arduino IDE. It's connected LED will let you compare and provide some reflective feedback to analyse gray scale light ranges. Different colors will apply but only gray scale values will be outputted. This new design includes a much better quality connector that increases life span of the sensor, better voltage range and easy to use.
This is a common sensor for automatic lamps that are turned on when light is not enough. For example, with lack of sun light the value will be low enough and this value can be used to trigger a relay to enable a lamp and shutdown the lamp when the sunlight is back. Other light sensitive devices could be used for simple data transmission, like Morse code with a flash light. And can also be used as a line follower detector.