By design it is meant to be used on a HUGE lava lake like the ones in the nether but it could be used in the overworld. What it does is it first off chunk loads itself, then once it has a power source and somewhere to send the lava (a tank, tesseract, or fluiduct, etc.) it will go to the bottom south west corner of the chunk it is currently in and start replacing what ever lava it takes with a type of stone or cobblestone. It doesn't just take the surface when it starts on the top it then goes down as far as it can, then north one block, then down again, as so on till it hit the edge of the chunk. Then it will go back to the right of the very first block it took start there then go down and north and so on till that whole chunk is done. It repeats this till it can't find lava anymore, but it can take from like a 5x5 chunk area I think. 2 chunks to the west and north, and 3 to the east and south of itself.
These are very handy for making a lava powered base once you can tesseract it back from the nether. Hope I explained this clear enough.