Uh, well, yes. Specifically, you need BG1, BG2, and the latest patches for both. TotSC and ToB are recommended but not necessary, too. But I assumed he was asking just about the downloads, anyway.
And what it does is run the BG1 content on the improved IE used by SoA, thus allowing for higher resolutions (as high as SoA normally allows for), and the extended rules of that game, thus allowing you to start the game as, say, a half-orc kensai.