Basically it has a minimal Linux underneath that exposed the PCI bus and many devices to the AmigaOS as real hardware.
You had as direct as possible access to the hardware so it acted much like a Draco in that you could only run OS legal applications with Picasso96, no hardware banging, although at least the CIA's were there.
I'm not sure that the chipset emulation would slow it down by much on todays PC's, but that was some of the justification.
You could also mix and match x86 libraries and executables. For example you could use an x86 native datatype and 68k apps would benefit from them.
Part of the idea was to slowly move more and more of the OS to x86 without having to do it all at once. It also made more hardware available, giving a huge speed boost, more RAM, RTG, AHI and network card at very little cost.
At the time it seemed to be a great option, but the licensing wasn't done properly so it was killed in court.