...Basically, it tests a browser on standards. Web standards.
Rendering, and all sorts of fun shit.
And IE fails horribly on it. Hell, Phoenix 0.1 (First version of Firefox), which was made in 2002 before the test, scores a 36. Meanwhile, IE8, which was made in...2009 I believe, scores a 20.
The most recent test build of Firefox with HTML5 enabled scores a 97.
Right now, Safari, Google Chrome and Opera pass the test with a 100/100.
In short, IE sucks and it needs to die.
http://en.wikipedia.org/wiki/Acid3