Using it allows player to chose any adjacent tile. If a creature stands on chosen tile, item will be consumed and creature's attribute&skill sheet will be called (similar to Informer's service of investigating pets). Can be used on hostile creatures.
Unlike most tools, the item is expended upon being used, limiting its value (especially given its very high cost).
If a player is willing to savescum a bit, a single Insight Lens becomes very functional. Player can save before using it, analyze, and load, essentially allowing the player to check everyone constantly.