Simply put, lens filter is a powerful and versatile effect plug-ins for iMovie you'll come across. In the Old Days(TM), people (usually pros, but nowadays casual users as well) used translucent colored pieces of glass in front of their cameras to alter the light that enters the camera.
This allows them to achieve dramatically better looking footage, as well as establishing color schemes. Using these filters was (and is) so common, that their name has carried over to iMovie ? effects were called 'filters', and throughout Apple's documentation (for developers) an effect is still called a filter.
One of the most common, and basic filter (and one that everyone should have) is the skylight filter (a slightly pink filter) which makes the skin tone look much warmer. Likewise, blue filters are used when shooting indoors to counter-act strong incandescent light.
Also very often used (especially with moving media), are graduated filters. you will definitely have seen the effect of such a filter, even though you might not have noticed it.
They are most commonly employed when shooting outdoors to make the sky look blue (which is usually doesn't because the sky emits too much light, and turns out to be white on film/digital media).
Our lens filter plug-in can create this (and millions of other) effects after you have shot the movie, allowing you to correct some, and enhance most of your clips.
Because of the freedom digital medium (and iMovie) gives you in post-production/processing, 'lens filter' can create effects that you can't create in the field. Furthermore, since iMovie allows you to undo a filter effect, you can experiment with filter at your leisure ? not while your cast and crew (or mother-in-law) is waiting.