The extension is created to help fellow opencart developers to show their admin extensions to potential customers, without need the customer to type demo/demo in the login screen.
By adding "autologin" in the url of your shop, the extension will login automatically the user "demo" with password "demo". There is no difference between this and submitting the form, so you could disable or delete the user and the the autologin will not work.
There is no particular usage of this extension for "normal" opencart users. It's only for developers.
Here is example:
So let's say your extension is like:
Then by using the extension and adding &autologin in the url your potential customers will land exactly on the extension screen.
Here is a demo:
Instant Product Editor Demo
(look ma' no login screen :)).
The logic is very simple:
1. force method to be POST
2. set username and password post vars to "demo"
3. set redirect url to the same url requested, but without "autologin" in it.
Check the source to see how it's done, there is nothing special.
Take a look on my other extensions
BTW, check that website: extensioncart.com/scoreboard - you can see all extensions from Opencart Marketplace, scored by sales or downloads.