im confused as to what it does, is it just lighting, or does it improve graphics too?

anyone, someone must know, i havnt tried it

It does graphical post-processing, which includes features such as HDR, Bloom, Ambient Occlusion, Depth of Field, etc.

Simply put, it does fancier lighting (and more), and is extremely configurable (either by you, or by downloading other peoples configurations). For example, I add a sharpening effect, brighter colors and brighter light during the day, and greater contrast in general.

Skyrim looks great, especially with high res texture replacements, but it looks "flat" to me. In real life, different light sources throw different colors of light, light subtly reflects off walls, etc. ENB adds these types of effects to the game, but at the cost of a small FPS hit.

My current favorite configuration for ENB is Confident ENB: http://skyrimnexus.com/downloads/file.php?id=5253. It darkens the nights (like a lot of other mods) and brightens the day, but it also adds a quality to daylight that doesn't exist in default Skyrim, as if the sun is really shining on the environment. There are other good configurations, such as Skyrim Enhanced Shaders: http://skyrimnexus.com/downloads/file.php?id=822.

There are similar mods that change the look and lighting without the effects, such as No Tint, http://skyrimnexus.com/downloads/file.php?id=648 and Realistic Lighting without Post-Processing, http://skyrimnexus.com/downloads/file.php?id=4323. These don't have the FPS cost, and a lot of people love them. To me they look good, but still suffer from the same flatness as default Skyrim. The above RLPP mod does have a really nice feature, though. It makes sneaking easier in shadows and harder in light, so the changes to the environment affect NPC AI. The ENB mod and other post-processing (like FXAA) only change the graphics.