What is the point of X-UA-Compatible?

I don't understand at all what <meta http-equiv="X-UA-Compatible" content="..." /> is for...

Can someone explain...

• What it does for different values of content?
• What omitting it does for different browsers?
• What the motivation for it is?
• Why it exists?

It's a horrible hack to cater for different bugs or incomplete implementations in various versions of the Internet Explorer browser. For example, this:

<meta http-equiv="X-UA-Compatible" content="IE=EmulateIE7">

will instruct IE9 to pretend it's really IE7 to avoid any problems that might occur if your site works in IE7 but not IE9.