A Flex Fuel Sensor measures ethanol content in a cars fuel system. The sensor provides a pulse width modulated signal that the ECU interprets to determine the percentage of ethanol in the system, where it can then calculated he required amount of fuel to inject. This is needed to be able to run E85, E98 or any percentage of ethanol in your car.
Using this sensor and a capable ECU, the system can automatically adjust fuel, ignition, boost and other parameters, always keeping your tune correct no matter the ethanol content.