This is explained in your mod handbook that you were emailed, please review that. In short, it's simply a way for Super and Uber mods to help "promote" content that they think is good quality and should be viewed more by the community. It does not "feature" the post, but it does help boost the question, helping it become "popular."
It's in the moderator handbook, if you think the content is REALLY suitable for GAG, then the admins will look at it and possibly select it as "Great", which means it'll be featured for a certain amount of time.
Please note that once you put something for ModSelection, you can't actually undo it.