Apparently, they promise to build part of your ICO for you in exchange for a 50BTC upfront fee (link at top right - 'Apply for FREE ICO').
Alternatively you can get their service without an upfront payment (hence 'FREE ICO'), by instead reserving 250 BTC worth of your ICO's tokens for holders of ICOS tokens. The latter can burn each ICOS token for 0.04 BTC worth of your token, which works out to a 75% discount on your presale price assuming that the ICOS tokens were bought during the ICOS ICO (for 0.01 BTC each).
The catch is, that since there's only 250 BTC reserved of each token, while there are, at least initially
4 * BTC_raised_in_ICOS_ICO
in outstanding rights to discounted tokens, buyers will only ever get a tiny discounted allocation.
You're currently looking at needing to participate in 100 ICOs until you've converted all your ICOS tokens. As there is no cap how much ICOS can raise, so this could get much higher.
Also, when the 250 BTC are oversubscribed, allocation is pro rata, based on how much ICOS you would be willing to convert. So lets say you've done due diligence and determined something will go up, now you're locking up your funds in ICOS and only a tiny fraction will buy the thing you want. It might make more sense to just sell your ICOS on an exchange and use the proceeds to buy the ICO normally.
The other catch is that the SEC might ban all this business before you find 100 ICOS-incubated ICOs to invest in. Nevermind that i haven't seen a reason why ICOS itself would ever acquire any clients. But they do have 10M$ in cash now.