Atmega16u2

Hi guys,
On the Arduino one, what is Atmega16u2 for?

Performs USB to Serial interface.
Can be reprogrammed to do other functions.

Performs USB to Serial interface.

What does it mean?

USB connector on the computer uses two low voltage level signals at very high speed, data only goes 1 direction at a time.
UART interface on the '328P chip uses Rx and Tx signals at 0-5V levels that can go both directions at the same time, but at a much lower speed compared to USB speed.
The '16U2 has hardware interface to send / receive both levels of signals, and is programmed to talk to the PC at high speed and pass data out its Tx port to the '328 chip, and receive data on its Rx port and pass it out to the PC. Part of the programming is receiving the speed from the USB side to use for the Rx/Tx port on the serial side to the '328.
You can google USB and read a lot more details about how USB works.