Seems to work just like spam, with a lazy html tag.
This won't work if you are offline, or if you use a proper mail client that blocks external http requests (like Pegasus [:)], or just about everything now).
It looks like it inserts itself as an outgoing mail proxy between the client and the SMTP server and inserts the tracking tag and advertising spam into your mail.
I wouldn't touch this with YOUR bargepole [:D].
What is wrong with 'requesting a read reciept'?
Here is another thread about MSGTAG.