In this setup (i.e. no feedback), the Op-Amp acts like a comparator: If the inverting voltage is greater than the non-inverting voltage, than the output voltage jumps to its minimum value; otherwise, the output is at its maximum voltage.
With a triangle/ramp input on the non-inverting input, we've created a square wave whose duty cycle can be adjusted with the potentiometer, which sets the voltage level at the inverting input.
At a high enough frequency, the human eye will percieve the LED as being dimmed instead of flickering.
