The diode in this circuit passes the positive part of the input waveform (minus the diode forward voltage drop), which is then lowpass filtered by the RC circuit. The result is a waveform that follows the peaks of the input waveform. The RC time constant is a trade-off: A faster time constant will respond quicker to changes in the input amplitude, but will have lots of ripple. A slower time constant will be smoother (lower ripple), but will take longer to respond to changes in input amplitude.
