It is commonly used by coaches to estimate an athlete's VO2 Max (Maximum oxygent uptake) and aerobic fitness. It's is especially useful for hockey players.

The beep test involves running continuously between two points that are 20 m apart in time to recorded beeps set intervals. As the test proceeds, the interval between each successive beep reduces, forcing the athlete to increase velocity over the course of the test, until it is impossible to keep in sync with the recording.

The recording is typically structured into 23 'levels', each of which lasts 60 seconds. Usually, the interval of beeps is calculated require a speed at the start of 8.5 km/h, which increases by 0.5 km/h with each level. The progression from one level to the next is signalled by 3 rapid beeps. The highest level attained before failing to keep up is recorded as the score for that test.

Stage or Level	Shuttles or Runs	Distance(m)	Secs per Run
1	7	142	8.00
2	8	150	7.58
3	8	158	7.20
4	9	167	6.86
5	9	175	6.55
6	10	183	6.26
7	10	192	6.00
8	11	200	5.76
9	11	208	5.54
10	11	217	5.33
11	12	225	5.14
12	12	233	4.97
13	13	242	4.80
14	13	250	4.65
15	13	258	4.50
16	14	267	4.36
17	14	275	4.24
18	15	283	4.11
19	15	292	4.00
20	16	300	3.89
21	16	308	3.79
22	16	317	3.69
23	17	325	3.60

References : Wikipedia

Links : Australian Defence Website (Beep test audio file available there)