What is this loopback tester do? If it works.

I have an old co-worker who at least knew enough about networking to
try to teach me a way to figure out what class an IP address is, and
what IP ranges are available in a subnet.
I've since forgotten all that (and wish I still knew it.)

But anyway, he gave me this little device, a few inches of CAT-5 with
both ends terminating in the same RJ-45 plug.
It looks like wire 1 goes to 2, and 4 goes to 6.
It's my understanding this thing is supposed to fool the NIC that it's
plugged into a network, allowing you to...do something.
But I don't know what. Supposedly something that's more infomative than
just pinging 127.0.0.1.

Any ideas what this does and how I can use it?
Thanks!
PS: Any pointers to a site that teaches you how to figure out what IP's
are available in a subnet would be cool too. =)