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If you want an overall explanation, it's a temporary event on bundles individually that allows people to buy multiple copies of the bundle at a discounted price (as they get additional copies of the bundle), so it's great for giveaways and specially for group buys.
I thought I'd never use it, but I bought a bundle via group buy on happy hour and it was well worth it. Spent $1.91 for a $3.99 (lower launch price) bundle.
In case you're interested in indiegala groupbuys that all make use of happy hour: http://steamcommunity.com/groups/groupbuys/discussions
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Discounted price for their bundles.
People then buy them in bulk and split them, so it costs ~$1 per bundle instead of $4.
Go to GroupBuy Steam group if you want to get in. http://steamcommunity.com/groups/groupbuys/discussions
Be aware you will buy and collect more game than you could ever play if you start buying them (and mostly craps, but some are ok).
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This was the explanation that helped me to understand it :)
https://www.steamgifts.com/discussion/o0EVj/please-explain-indie-gala-happy-hour-for-the-especially-stupid#HovYNVb
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