The hopper(now called Chute) is from the mod Buildcraft 3. It has a 4 slot inventory and can be connected to blocks with inventories (Electric Furnace, Stirling Engine, etc.) effectively increasing their internal storage capacity.
When the connected block's inventory is empty (or space for more of the same item it has), Items from the Chute will drain into the inventory of the block below. At present items simply enter the top slot of the connected machine, regardless if this is appropriate.
Unfortunately, the Chute is not able to pull items floating in the world into it; they must be placed in, either manually, or via a pipe . Connect the hopper to Obsidian Transport Pipe if you want to be able to throw items in.
The Chute does not output into pipes without using a powered wooden pipe, meaning it is inferior to the cheaper chest for putting items into pipes.
Note that it is possible to put Chutes on top of each other, they will drain into the next one without any problems. Also hoppers/chutes may have a problem on connecting to forestry machines.