cr0sh2:
What does this do or give you that you couldn't get with an FTDI serial to USB cable (or chipset)?
Simple: A usb hot-pluggable hid device. It's essentially a driver implemented in hardware instead of software.
In other words, instead of plugging in the spaceball and having to set your computer up to understand what a spaceball is, you plug a (SpaceOrb360, SpaceBall4000, etc) into this, and this into the computer, and the computer's hid stack says "Aha, I see a six-axis 16-button game controller, a keyboard, and a mouse have been connected"; it doesn't have to know anything about SpaceOrbs, their communications protocol, etc; as far as the computer is concerned, you just have a generic gaming device/mouse/keyboard.
Primarily it's oriented towards gaming (I've successfully played FPS games like Left4Dead or Descent as well as strategy games with it), and a lot of the emulation (binding axes to mouse axes, or saying "if you push far enough in the +y direction, press and hold the W key") came from that requirement. And I have to say, playing Descent again with a desk-mounted spaceball is... well, confusing as hell to be honest. But you could certainly bind axes and buttons to mouse/keyboard events and use it for CAD programs (particularly if they're flexible enough to respond to generic HID devices with axes and buttons).
You can also fly around Google Earth with it, which is cool.
The basic idea is really very flexible... I'm currently trying to make another adapter for my old Thrustmaster FCS/WCS/Rudder pedals...
Papa-J: Thanks! I'll respond directly, but the short form (as you've noticed) is that you need either Arduino 0016 or the new version of the library for Arduino 0018 which I just fixed yesterday. Sorry for the slow responses on both... I forgot the "check if you wish to be notified" button and wasn't monitoring this thread.