SSH is a means of transfering files between your computer and your iPhone. Say you had an app on your computer than was intendednto run on the iPhone, like Customize. How do you get it onto the phone without Installer? You SSH into your iPhone, and drop Customize into the applications folder.
To use SSH, you need to have installed Open SSH on the iPhone and you must have an SSH client, like WinSCP or Cyberduck, on your computer.