Twist color is a color effects iMovie plug-in that lets your shift the colors in a clip through 360 degress (this is slightly difficult to explain, because the results are unnatural, strange-looking pictures). The plug can either shift all colors a certain amount, or animate a color shift (up to 10 full revolutions).
What should I use it for?
Shifting the color for low values can correct some problems experienced when filming under colored lighting conditions. Generally, though, twist color is more a cool 'special effect' to de-naturalize a clip of to animate the colors of an otherwise boring title.