It can also be used like a bookmarks system. You add a star to a project and then you see all repos that you added a star: https://github.com/<username>?tab=stars

I like to Star Repos that I wanna take a look at later that I may not have an immediate use for. You can view any repos you've starred right on Github.

Basically equivalent to a like, just one measurement on how popular a project might be within the community.

Definitely not an indicator of quality of any kind.