It's a scripting language that is designed to work with C (and C++). It is designed to be embedded into C/C++ programs. Which means unlike a lot of other scripting languages, it makes no use of global variables and such, this means you can easily thread lua scripting engines.
It also makes claims about being the fastest dynamic scripting language.
I've made use of it in PC based C++ application for creating a plugin scripting interface, and also used it as a embedded scripting language. Its quite versitile, nice and small.
as a general purpose scripting language? Its not quite in the same league as your ruby/python/perl type stuff. It doesn't have as many libraries and the user community is pretty small.
But for extending C++/C apps? its awesome.