Many of the more advanced Android phones (such as the Nexus One and the Motorola Droid) include an "ambient light sensor". This sensor allows the phone to adjust the brightness of the screen based on how bright the environment is.  Turn the lights off in a dark room, and the phone screen will dim.  Move into a brightly lit room or go outside, and the screen will get much brighter.

For phones that have an ambient light sensor enabled on their phone (see your phone's Settings->Sound & Display->Brightness), users should set the "Brightness Level" setting of Screebl to the value of Low.  This will actually allow your phone to adjust the screen brightness using the light sensor.