When used in combination with Winter, all physical and elemental damage is converted to cold damage instead.
In PvP, this is a handy way to get around Warrior's additional armor bonus against physical attacks. However, some other professions (most notably Rangers and Elementalists) may take less damage due to various defenses against elemental damage.
This skill used in combination with Mesmer's Elemental Resistance stance and a set of Armor with a Pyrebound Insignia will give a ranger an effective 155 AL against physical/fire attacks and a 140 AL against other elemental attacks, without worrying about the penalty from the stance.
This spirit can be used to negate necromancer Orders spells as they require physical damage to add extra damage.