Every cell in a grid is either alive or dead, and its next state depends solely on how many of its 8 neighbours are alive. A live cell survives with 2 or 3 live neighbours; a dead cell is born with exactly 3; everything else dies (from overcrowding or isolation). That's the entire rule set, yet it alone produces still shapes, patterns that blink on a fixed period, and even "gliders" that travel across the grid forever.
Introduced in Scientific American in 1970, it caused a stir for showing that something as complex as "life-like" behaviour could emerge from such a tiny rule — and it became the piece that introduced cellular automata and the concept of emergence to a wide audience. It was later proven Turing complete: given enough grid, the rule alone can compute anything a computer can.
Designers use it for rule-driven, ever-changing background textures, decorative loading-screen animation, and "living grid" interaction concepts.
When to use
Use it for a rule-driven, ever-shifting background or loading-screen decoration. Seed a known pattern (a glider gun, say) instead of randomness to guarantee specific motion.