Color accurately monitor
Frame accurately monitor
Layoff to base band source (regardless of type, SD, 720/1080 HD)
Live direct to disk encode from camera glass to ProRes422
Embed LTC time code in DtD capture for multi-cam
Signal A<->D and frame size conversions separate from FCP
Depending on your needs, it may not be the right device for you...but it opens up a whole lot of possibilities for professional acquisition and output.
NOt only that, not everyone captures from firewire enabled media devices (such as DV), or tapeless formats such as P2. Also, some people work in higher bitrate timelines (such as uncompressed or ProRes) and capturing over firewire does not allow for this.
The ioHD allows you to capture to different codecs.
Even if you do capture from P2 or DV, the io allows you to monitor and layoff to whatever deck you want, as Mike has already mentioned.
Just to add that the Io boxes (namely the smaller ones) are great for remote-based editing on a Powerbook/MacBook Pro when external devices are needed in the loop (video monitors, decks, etc).
Another good example is on a chroma-key shoot. You can use a camera with a component output (say SDI) and output the live feed from the camera directly into the Io and then to the computer (as a live capture). Even on a camera that's HDV or 4:1:1 color space, you'll now capture at full 4:2:2 uncompressed quality. Obviously this is a huge advantage over the camera's own tape format. Even with an HVX200 you can eliminate any compression otherwise found in the DVCPRO HD format. For chroma-keying, this is a huge advantage.