It's responsible for translating Mesa state (blend modes, texture state, etc) and drawing commands (like glDrawArrays and glDrawPixels) into pipe objects and operations.
Traditional fixed-function OpenGL components (such as lighting and texture combining) are implemented with shaders. OpenGL commands such as glDrawPixels are translated into textured quadrilateral rendering. Basically, any rendering operation that isn't directly supported by modern graphics hardware is translated into a hardware-friendly form.
Future state trackers will be created for OpenGL 3.0 and OpenGL-ES 2.x.