"Google Chrome Frame seamlessly enhances your browsing experience in Internet Explorer. It displays Google Chrome Frame enabled sites using Google Chrome's rendering technology, giving you access to the latest HTML5 features as well as Google Chrome's performance and security features without in any way interrupting your usual browser usage," explains Google.
There are many Google services that use Chrome Frame: Google Calendar, Google Drive/Docs, YouTube and more. Now that Google Apps dropped support for old IE versions (IE6 - 2010, IE7 - 2011, IE8 - November 2012), Chrome Frame is the only way to use Google Apps if you can't update to a new IE release or switch to a different browser.
To see if Chrome Frame is installed, you can go to a site like YouTube or Google Calendar, right-click and see if there's a menu item called "About Chrome Frame". Another option is to type gcf:about:version in the address bar and see if a similar page is displayed.
To uninstall Chrome Frame, "use the standard Add or Remove Programs tool in the Windows Control Panel (called Programs and Features in Windows Vista and Windows 7)". It's not clear if Chrome Frame is only installed for new Google Toolbar or if the future updates will also include Chrome Frame.