I used this a lot back in the days when cars had carburetors to get my cars to pass the state emissions tests. If you have an old car like those, this can be very handy for adjusting carburetors and tuning up. Still works like new -- see the photo where it's measuring the exhaust of a modern car showing low CO emissions.
According to the manual (included), it works by measuring the thermal conductivity of the exhaust gasses.