claraloft allows you to build meshes from a series of cross-sections. This is often referred to as "skinning", or "lofting". The cross-sections are normal 2-sided trueSpace polygons, and must have the same number of vertices and the same vertex order. When you hit the "loft" button, a solid mesh is stretched over these cross-sections. You can then manipulate the cross-sections (including point manipulation), hit "update" and the lofted object will be updated to match the new position/size/rotation of the cross-sections. You also have the ability to keyframe these updates for animation purposes.
Lofting is often used to create heads, because you can start with a curve describing the profile of the head and one describing the view from the front, then work in the details. You can work from photographs, tracing with the 2d polygon tool.
claraloft would perhaps better be described as "pseudo-lofting" - instead of interpolating between cross-sections, the skin matches the cross-sections precisely.
claraloft is fully supported under version 3.1 and higher of trueSpace.