Originally Posted by DasMatti
This is a measuring device. It measures how much travel you use at the moment. So the suspension can use all the required travel. The device recognizes on what kind of road/offroad you ride on, and adjustes your compression and rebound settings.
I think it's a little helper engine, to give you some extra lift on the rear wheel when you're stuck in a ditch or mud hole. You know, like the booster some steam locomotives had on their tenders. In fact, it looks like it's steam operated - which also finally explains that whole watercooling thing: