What mouse acceleration essentially does is applies a sort of logarithmic scale to the distance moved per milisecond based on the speed you are moving at.
The general concept is that when you are moving the mouse faster, you are trying to move it to a point further away, so acceleration scaled the distance the pointer will move to be even more than you moved it. You will slow down as you get closer to your target point, and then accuracy is more important, so it acceleration will move the mouse pointer a smaller distance than what you really moved it.
I don't have the references to studies on this, but I read one years ago, and for the average person, this resulted in less movement of their mouse while working as well as faster and more accurate pointer movement.
To experience this directly, turn it on and then move your mouse pointer across the screen very slowly and note how much your mouse had to move. Then move your pointer across the screen fast and note the difference. If you turn acceleration off, there will be (or should be) no difference.