In short, here's what this module does:
For site owners:
This module can provide you with readable passwords. Some users will be able to see other users passwords in plain text if they have a role with the permission to do so.
This module can provide you with a very simple and easy to use encryption API. Just check out the aes_encrypt and aes_decrypt functions. It really can't get any simpler.
In a nutshell:
$encrypted_data = aes_encrypt("mydata");
$decrypted_to_plain_text = aes_decrypt($encrypted_data);
Note: This module requires an AES implementation, which can be either the PHP Mcrypt extension or the PHP Secure Communications Library.
The Mcrypt extension needs to be installed on the web server, so if you're on a shared host you probably can't use this if it's not already installed (you'll find out if you have it or not when installing this module).
If you don't have Mcrypt, then grab a copy of PHP Secure Communications Library (phpseclib) from here: http://phpseclib.sourceforge.net/
Just extract that zip into a directory called "phpseclib" inside the aes module directory and you should be good to go.