In
Star Trek technobabble, it's ..well.. it's the excuse that the writers of the show use for how everybody can understand each other. In
Star Trek: The Original Series it was a device that made all on ship and ship to ship communications between humans and klingons so convenient. It translated everything into
english for the convenience of the audience. Why
klingons' lips weren't moving funny like in those
Godzilla movies, I don't know. I guess Universal Translators could translate lip movements too.
This is perhaps the least plausible of all the Star Trek technobabble crap, but hey, it's just a show. In Star Trek: The Next Generation and beyond, it's more like software that fits nicely inside the communicator badge all starfleet officers carry. However, generally they try just not to talk about it much because it's pretty damn iffy even for speculative fiction's standards. Douglas Adams came up with a much spiffier of an idea for his Hitch Hiker's Guide to the Galaxy series of books. He just said everybody kept a Babel Fish in their ear and moved on.