MPLS stands for MultiProtocol Label Switching. It kind of replaces IP routing - packet forwarding decision (outgoing interface and next hop router) is no longer based on fields in IP header (usually destination address) and routing table, but on labels that are attached to packet. This approach speeds up forwarding process because next hop lookup becomes very simple compared to routing lookup (finding longest matching prefix).

Efficiency of forwarding process is the main benefit of MPLS, but it must be taken into account that MPLS forwarding disables processing of network layer (e.g. IP) headers, therefore no network layer based actions like NAT and filtering can be applied to MPLS forwarded packets. Any network layer based actions should be taken on ingress or egress of MPLS cloud, with preferred way being ingress - this way, e.g. traffic that is going to be dropped anyway does not travel through MPLS backbone.

In the simplest form MPLS can be thought of like improved routing - labels are distributed by means of LDP protocol for routes that are active and labeled packet takes the same path it would take if it was not labeled. Router that routes unlabeled packet using some route for which it has received label from next hop, imposes label on packet and send it to next hop - it gets MPLS switched further along its path. Router that receives packet with label it has assigned to some route changes packet label with one received from next hop of particular route and sends packet to next hop. Label switched path ensures delivery of data to the MPLS cloud egress point. Applications of MPLS are based on this basic MPLS concept of label switched paths.

Another way of establishing label switching path is traffic engineering tunnels (TE tunnels) by means of RSVP TE protocol. Traffic engineering tunnels allow explicitly routed LSPs and constraint based path selection (where constraints are interface properties and available bandwidth).

Taking into account complexity, new protocols and applications that MPLS introduces and differences of concepts that MPLS adds to routed.
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