Can someone explain this device to me? If I have two separate programs that require an ilok will one work for both programs?
It's pretty much a tool of Satan. The promise is that you can store your licenses on a dongle to avoid the hassle if you move software back and forth between machines a lot. The reality, however, is that if you lose the dongle or it gets stolen, you're basically out the total cost of all those software licenses.
If you spend an extra $30 a year, you can buy a "insurance policy" called ZDT. With that, the iLok folks will give you a two-week temp license to get you buy until you can buy a new license, but that's all that they guarantee. You get to negotiate with the individual manufacturers to
maybe get a replacement. Now some companies who use iLok will give you a new license if that happens, but it is entirely at the company's discretion, and the biggest iLok abuser, Waves, will not.
Plus you now have an extra unnecessary device that represents a significant single point of failure. Anything goes wrong and now a whole truckload of software won't work.
My policy on these things is "just say no", and I encourage others to do the same. Just my $0.02. Unless you absolutely have to move your software back and forth between a bunch of different machines (and if so, why!?!), it just doesn't make sense.