If the player bet on the winning card, he doubles his money if he bet on the losing card, he loses his bet if he bet on any other card, he neither wins nor loses. The croupier deals out two cards: one winner, and one loser. A simplified look at faro is to think of it similar to roulette: Players bet on a value of card and hope that it comes up.
To understand its usefulness, it helps to understand the game it was used in. 'The original purpose of the faro shuffle was to gain an advantage at the game of faro. The original poster might find this information useful: Reviving this briefly because I came across an interesting paragraph on Denis Behr's database of conjuring credits while I was researching the Faro Shuffle.
