As mods, 3rd party applications that were previously isolated can now take advantage of platform APIs to implement unique experiences directly within Cyanogen OS. Users can install a variety of mods to extend the functionality of their devices. For example, through Cyanogen's partnership with Microsoft, a user can install the Skype mod directly into their dialer to add VoIP calling functionality or they can install the Cortana personal assistant mod to power features like voice-activated selfies.
It's all pretty nifty, and all made possible because of two things: first, Android in and of itself is incredibly extensible, and it contains a ton of APIs for these sorts of things. A lot of this integration can be achieved simply by installing applications from Google Play. Second, it's made possible because Android is open source, so that Cyanogen can make a few changes and claim they're taking Android away from big, bad Google who is giving them Android in the first place, and without whom Cyanogen wouldn't exist, or wouldn't continue to exist.
In any case, let's see if other 3rd parties are going to adopt this. It seems like Android as-is is extensible enough, so I don't see much life in this for most developers and users.