This mechanism physically splits the double G keys. When playing G, the keys behave as normal, closing both of the G keys via an adjustment tab (or screw) between the two. When fingering high E (3rd octave), the mechanism closes the lower of the two G keys.
This creates ideal venting for this note and therefore makes this usually troublesome note very stable. One can now attack the high E with confidence, as well as slur from high A to E. This venting improvement also improves intonation on the E.
The E mechanism is very prevalent in foreign markets but not seen as often here in the States. I guess we Americans being a hardy breed can tough it out on one note. Now if someone can help me with my high F#! Many of us who see the musical advantage prefer not to add the additional mechanism, citing differences in weight and feel. That being said, some companies make a very unobtrusive mechanism - Powell for example.
Note: Some Japanese makers offer the E-mech as standard on offset G models. Such is the case with Pearl. Many companies will offer the E-mech only on offset models, as doing it on inline flutes is problematic. By the way, if you see an E-mech with a "clutch", this means the mechanism can be deactivated.