The idea is fairly simple to understand - instead of a traditional iPhone case, you'll put your iPhone into a Leica body. You'll use the Leica rangefinder, store images on onboard memory or on an SD card, and you can have the camera on and ready to shoot in less than a second.
This isn't just a fancy looking case though. The camera body doesn't depend on the iPhone 4's processor or built-in camera for pictures. The iPhone contributes a high quality viewscreen, the ability to quickly upload pictures, as well as quick and simple upgrades.
Keep in mind, this is a concept. While it's incredibly interesting, it's also not something that's coming any time soon. Still - it's a fascinating look at what the future may hold.