Its a reasonably safe way to do full contact sparring with a minimum of 'armour'. I've done both the padded stick and rattan and prefer the padded.
At its 'basic' level, its little more than a piece of PVC pipe or wood covered with a dense foam rubber. The ActionFlex have a bit more spring to them which disapates the energy of the strike, allowing a full force swing to be done with minimal impact damage to the target. (Note, head and eye protection always a must.)
I've built my own, but prefer the actionflex.