It's ... something... that you can loop over. That might be a List or an Array or (almost) anything else that supports a foreach loop. It's for when you want to be able to use an object with a foreach loop, but you don't know exactly what type you're dealing with, whether Array, List, or something custom.
So that's the first advantage there: if your methods accept an IEnumerable rather than an array or list they become more powerful because you can pass more different kinds of objects to them.
Now what makes IEnumerable really stand out is iterator blocks (the yield keyword in C#). Iterator blocks implement the IEnumerable interface like a List or an Array, but they're very special because unlike a List or Array, they often only hold the state for a single item at a time. So if you want to loop over the lines in a very large file, for example, you can write an iterator block to handle the file input. Then you'll never have more than one line of the file in memory at a time, and if you finish the loop earlier (perhaps it was a search and you found what you needed) you might not need to read the whole file. Or if you're reading the results from a large SQL query you can limit your memory use to a single record.
Another feature is that this evaluation is lazy, so if you're doing complicated work to evaluate the enumerable as you read from it, that work doesn't happen until it's asked for. This is extra beneficial, because often (say, for searches again) you'll find you might not need to do the work at all.
You can think of IEnumerable as if it were a just-in-time List.
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