New Relic is a performance monitoring tool that can be used for three main purposes: 1) performance optimization of projects, 2) identifying elusive bugs and performance peaks during incidents, and 3) long-term performance monitoring for scalability. It tracks page response times, analyzes bottlenecks, sets alerts for error rates, and provides reports on application performance over time. The workshop discussed how New Relic can help optimize performance by identifying slow pages and recursive loads, as well as troubleshoot bugs and bottlenecks during incidents when problems cannot be reproduced.