It will display related products according to similar attributes.
For example it product is available in yellow color then all products having yellow color will comes to related products. Similarly if perfume is available in 25ml then perfume of same size will come.

It will not disturb any core code. You just have to place xml in vqmod xml folder.
Please check demo video from here: http://screencast.com/t/1mqKyTwTVp