What does this do? I don't understand.

You're able to perform a paralyzing palm in VATS. It numbs You enemy for THIRTY SECONDS. It is a little extreme.

It is random I believe - if you've got the Super Slam perk it works in a similar way to that.

Super Slam works only for Melee Weapons, doesn't it?

nope unarmed too, just has higher chance for two handed weapons. It is a really great perk for any melee/unarmed build. Not essential if your using a uber damage weapon, but very essential if your a fast swinging brawler. I have it on most of my close up characterts, but the ones that seem to truly benefit from it are the guys using smaller, faster weapons, "Love and Hate" "Chance's Knife" "Warclub from HH" etc if you have say 'Oh Baby' or 'thermic lance" you prolly are fine w/o it, stuff dies when you touch it, no need for knockdown lol":D

it only works in vats. so if you do a lot of fighting outside of vats, it might be wasted perk.

I just played new vegas and my guy just knocked a fiend down with super slam and a pool cue, so if it does not work outside of vats for you, I think your game may be buggy