Basically you input a short, memorable password and the app generates a password (Base64 encoded HMAC of the main password + the service name) for every online service.
For example, if the main password is "demo123", the generated password for google would be always "8evAtEhoU52n5WO6Y1wc", and for amazon it would be "MS1UopaiSRHJnbsyoSeU".
So why is it good?
The user can remember one simple main password, then just type it and copy from the app the generated password - easy.
Also some people use one password for every websites, which is a terrible idea since if one of the websites database is leaked, and the passwords aren't hashed, all of the user's other services are compromised. In OnePass you have a different hash for every service, thus even if the service database is leaked, you are safe.