Cheato is a type of algae that grows in filaments as opposed to being leafy. Picture string all bunched together. It grows pretty quickly, taking nutrients out of the water and binding them into growth. You then remove the nutrients from the system by pruning some of it out periodically. Another benefit is that pods (small crustaceans that many fish eat) tend to reproduce well in it.
Should you use it? That depends, but many people like to.
Oh, we generally break algae into two types-microalgae, the stuff that is too small to see easily, and macro algae, which is bigger.