The POD is an guitar amp/cabinet modeler -- it attempts, using digital signal processing, to mimic what happens to the signal from a guitar played through a desireable amp and cabinet and then miked and recorded to tape.
One of the models is called "tube preamp" and it's supposed to model what happens when you plug a guitar direct into a good old Neve preamp or somesuch device.
The POD is a great tool is you want many possible guitar sounds and the ease of use it offers -- just plug it into your sound card, as opposed to setting up an amp, playing it at a good enough volume to get its sweet tone, and get it miked well. Whether or not it sounds good enough is a personal issue. But you sure can't beat it's convenience.
The best sounds to me are the distorted ones, the clean settings are a bit thin to my ear, but part of that is the guitar used. My guitars are solid bodies and don't sound all that spectacular until the amp breaks up, anyway. If you use a semi-hollow or hollow-body axe you might find more character in the clean sounds.
