Just like widgets for Dashboard, and Apps for the iPhone, extensions for browsers allow people to add a number of features and functions to the browser to have it do exactly what they want it to do by tapping into a number of services. This has been one of the features that has made Firefox quite appealing, and people have desired to have this on other browsers as well.
Google's Chrome browser has supported extensions, but so far has kept this feature disabled for Mac builds. Currently, while the official beta version of the browser still has extensions disabled, the latest developer version has just been released with these extensions enabled.
Keep in mind that the developer release is an intermediate build between beta releases, and should not be considered either safe or stable. However, if you are a Google fan and enjoy Chrome, having these extensions available may be exceptionally fun and useful.