Yes, that's exactly what it does.
It works the same way as a Fear spell (which doesn't affect undead) in that it helps if you get overwhelmed or just make killing undead extremely easy. IIRC it's also more potent than Fear spells from the get-go.
Making undead run away, duh.
It does work on vampires, which is nice.
Having Turn Undead on a weapon.....Its like a weapon that has Undead Repellent on it.
It could be useful for fighting larger groups of undead, that way they're not mobbing you. Or making them flee so that you have time to escape. I can see the usefulness for a sneaky non-fighter type.
It's not useless for a fighter, every turn/repel undead spell will stagger undead enemies giving you time to attack while they recover, cast again to stagger and follow up with a few well placed blows. Want to become a master of Restoration? Turn/Repel Undead is the fastest way to do it, just make sure you apply it each time you face undead enemies and your Restoration levels will keep up with the rest of your primary skills.
And that's without having to actually affect them, too.
I should add that it needs to affect them for you to gain Restoration experience, but you're right, even the basic turn lesser undead could save your ass from being one-shot by a Draugr Deathlord Murderking
I really think that this is an instance that shows how the removal of spell making really hurts the game. You could have had an enchantment (or spell!) that Turns Undead and does Fire damage over time so you don't have to chase them around.
I had to deal with that a lot when I decided my character needed to use Turn Undead spells. Half of the time I would get "[thing] resisted Turn Undead" and while the windup is a little longer than usual it does leave them open for a beating.
If you're into dungeon-delving, and you're a Dawnguard, it might just be the most important spell in your arsenal.
I used the spell a few times to test it, same with fear... the way I see it just makes combat boring