KSQL is an open-source streaming SQL engine for Apache Kafka that enables real-time stream processing with features like native integration, fault tolerance, and support for late data. It is particularly useful for tasks like streaming ETL, anomaly detection, and real-time monitoring, while having limitations in ad-hoc queries and lack of indexed lookup capabilities. KSQL supports continuous transformations, windowing for aggregation, and can be run in various modes, including local and client-server configurations.