Update Checker allows you to check all your applications for updates on Google Play Store - regardless - even it was installed directly from Play Store or just downloaded from Internet sites or received from your friend. You don't need to have a Google account or Play Store application installed on your system.
If this application are present in Google Play Store - you get actual version number and possibility to update application - or try to search new version on your favorite forum or site.
There is a lot of Internet traffic used for checking - especially if you have a huge number of installed applications.
Application marked in colors when scanning are done:

Red - possible update found or it's not possible to determine current market version
Grey - application are not found in Play Store
Black - no updates found for this moment