ESP is designed for 90% of road users to prevent a crash/spin through loss of control. It is a fantastic bit of kit and should be left on for day to day driving. It CAN be turned off on some cars, but not all. (Solid light = disabled, flashing light = TCS off only) In the Leon it can be turned off fully and does not interfere, believe me, I know
As has been mentioned it uses steering angle, roll sensors and a whole host of other info to determine which way the car should be pointing, which way it is currently pointing/spinning and will brake individual wheels to pull you back in a straight line. It is very affective.
Again, as said above, when out for a spirited drive or on track, it is bl00dy dangerous when it kicks in mid bend if you are right on the limit of grip and feathering between grip and slip, so when I set out to have some fun, it goes off.
For day to day driving, such as in this weather when there is a lot of ice around, it is invaluable at enabling you to keep control of a spin which you otherwise would not be able to without the individual braking of wheels.