Does what it says. This search addon will send queries to encrypted.google.com. Doing this basically only adds the advantage of removing referers when you click through to a non-https site.
That is to say, if you do a search, and click a link, usually that website gets told "hey, this user got here from a google search page for 'xyz.'" Encrypted.google.com will link you to https pages instead of http, and remove that info if the page you are going to is not https.