Often it is necessary or desirable to balance the light intensity in one part of a scene with another. This is especially true in situations where you don't have total light control, as in bright contrasty landscapes. Exposing for the foreground will produce a washed-out, over-exposed sky while exposing for the sky will leave the foreground dark and under-exposed. Grad ND filters are part clear, part neutral density (available in grades of .3 (1 stop), .6 (2 stops), .9 (3 stops)). They allow the transition to be blended into the scene, often imperceptibly. A GND .6-to-clear, with a two stop differential, will generally compensate the average bright sky-to-foreground situation and is also the most popular density of the series.
Graduated Neutral Density factors:
GND.3 (exposure factor = 2x; exposure adjustment = 1 stop; reduces ISO 1/2)
GND.6 (exposure factor = 4x; exposure adjustment = 2 stops; reduces ISO 1/4)
GND.9 (exposure factor = 8x; exposure adjustment = 3 stops; reduces ISO 1/8)