4-way refers to both vertical and horizontal privacy, meaning that when your iPhone is in portrait or landscape mode, the field of view is obscured to the degree that while you can still see it, anyone sitting next to you trying to spy on you can't. It looks either mostly or completely black to them, depending on the viewing angle.
In terms of drawback, while the view from the front remains clear it does look slightly darker (think Avatar 3D glasses) so you may want to pump up your brightness slightly to compensate. Also, if you want to let the person next to you see your iPhone -- to watch a movie or help with Maps directions, for example -- you're out of luck. There's no such thing as selective privacy!
Application is simple and the case is thin, though you'll feel a slight ridge around the Home button cutout.
If you have sensitive information on your iPhone, or just don't appreciate snoops on the plane, train, or bus (or the desk next to you!) then it's definitely something to check out.
For more, check out the video from Macworld 2010, after the break, where NLU installs a ScreenGuardz on my iPhone (and yes, it stopped Leanna from peeking over my shoulder completely!