Distributed computing. Because Stanford doesn't have enough processing power to do their stuff, they have this special client program where they have special servers that send information to process and work on. When it's done it gets sent back completed. They're basically using other computers for cures. They're working on a whole ton of stuff like the cure for Cancer, Alzheimers Disease, Mad Cow Disease or so forth.
It won't bog down your computer because it takes whatever resources your computer isn't using to fold. So when your computer needs the extra power, there won't be any conflict as the program gives it back. If you're more of a Sci-Fi freak, you can also do SETI@Home which does the same thing as folding, but it's for the Search for Extra-Terrestrial Intelligence effort. Long story short, it's basically a human effort to find other forms of intelligence in our universe.