Cylinder Leak Down Testers work by adding compressed air to a cylinder though the spark plug hole and measuring how much pressure is lost and where that air is leaking to. This can be very beneficial in determining overall engine health or where a potential problem may be.
A solid engine will have less than 5% engine leak down an any cylinder, but generally anything less than 10% is acceptable. If you have 10% or more, you'll want to listen or feel for air coming from the intake, exhaust or crankcase breather. This can pinpoint a problem to the intake valve, exhaust valve or piston rings respectfully. If you pinpoint the leakage, double check the seal on the spark plug hole. Another possibility is a head gasket and the leaking air going into a cylinder next to the one you are testing.
Lead Down Testing is best performed on a warm engine and should be done at least once a year.