A polarizing filter removes secondary light, i.e. light that has bounced on a surface and become polarized.
This happens when light bounces off of things like a water surface, glass window, and even in the atmosphere. (Light that bounces off a metal surface doesn't get polarized though.)
If you filter out the light that bounces in the athmospehere, you will get a darker blue sky in your images. When you filter out polarized light in the sky, you get the highest effect if you point the camera 90 degrees away from the sun, and almost no effect if you point the camera towards the sun or away from it.
A circular polarizing filter is used in a SLR camera. As there is a mirror in the camera, the light has to be de-polarized after it has been filtered, or you would not see anything at all in the viewfinder when the filter is turned at certain angles.