There are three different use cases, analog and digital input and digital output. See here for more information.
Analog Input: Use with a variety of analog sensors to monitor light levels, temperature, humidity, energy, sound and other analog data. Events may be triggered on the changing values of these sensor devices.
Digital Input: Use with door or window contact switches to monitor status of doors or windows. Use in parallel with an existing security panel to monitor the status of security peripherals, such as motion sensors. Events may be triggered on the changing status of these devices.
Digital Output: Use with HomeSeer events to power LEDs, piezo buzzers or sirens or other low voltage, low current devices based on the changing status or value of anything in your system.