The module is still useful - although I believe it's included as part of Drupal 7's core functionality.
What AdminRole does is create a role which will have all permissions added to it as modules are created. Users set up with this role then can do most of what the user 1 (admin) can do, but not everything. (For one, running the update.php requires user 1 and there's no permission that allows another user to run it.)
There's some benefits to setting up an admin role as opposed to handing out user 1 passwords to everyone. One is that as people do things on your site, their user name gets written to the watchdog - so it's easier to find who did something rather than seeing all changes credited to 'admin'. Another is that if you need to revoke or remove a few permissions from a user, it's easier to change which roles are on their account than to give them a new account and change the admin password and pass the new password around.
Really, the admin account should be locked up tightly and used rarely - better to have developers and users working in their own accounts and taking advantage of the permissions system than giving out the keys to the kingdom.