system() is just like the C version of the function in that it executes the given command and outputs the result. If a variable is provided as the second argument, then the return status code of the executed command will be written to this variable.
If you are going to allow data coming from user input to be passed to this function, then you should be using escapeshellarg() or escapeshellcmd() to make sure that users cannot trick the system into executing arbitrary commands.
Note: If you start a program using this function and want to leave it running in the background, you have to make sure that the output of that program is redirected to a file or some other output stream or else PHP will hang until the execution of the program ends.
The system() call also tries to automatically flush the web server's output buffer after each line of output if PHP is running as a server module.
Returns the last line of the command output on success, and FALSE on failure.
If you need to execute a command and have all the data from the command passed directly back without any interference, use the passthru() function.