Well, in short Freevo is an application that turns your linux box into a HTPC (Home Theatre PC). This allows you to take an existing computer system with some type of video output (svideo out for example) and hook it into your TV/Projector. You then use this system to play various media on your tv. It has 4 or 5 main functions...
TV (if you have a tv capture card) where you can capture tv shows and program it to capture certain times and whatnot. If your system is fast enough it will support pausing of live tv and such too.
Movies for playing just about any type of video such as dvd's, or any type of computer media (which is great for anything your downloading from the internet).
Music for listening to whatever you want. It supports just about everything from streaming audio to mp3/ogg/flac or whatever you can find.
Pictures for viewing various types of digital images, jpeg, gif, tiff, or whatever.
Games for playing nes roms and such. I don't know much if anything about this option but I know it is there. I've heard some good and bad things about it. I think it's more beta and probably hard to get working although I can't say for sure obviously.
Freevo itself is a python application and it turns your system into a dedicated media playing machine. I have mine setup on a Epia M-10000 system using the digital spdif audio output to support fully dolby sound, and svideo out to my TV. I have an irman reciever so that I can use my remote that I controller my reciever/dvd/tv/vcr with to controll the freevo box. The system is running debian and boots up directly into X where it loads freevo and that is all.
Freevo uses various programs to do all the actual work such as playing video and whatnot and the application itself more or less just ties everything together in a sexy and smooth interface. It can use mplayer or xine for doing video, and mplayer or xmms for audio. The TV stuff I know very little about as I don't use it, and the game system uses mame or something similar I believe.
Of course, you can find more information at they're website, http://freevo.sourceforge.net/ They also supply debian packages so you can simply add a line into your apt sources for the deb packages.
So thats an outline of what it is Any other questions just let me know.