A "Shabbat Hotplate" is aptly named: It is used to keep food hot on Shabbat. Because of its low heat level, this equipment usually cannot actually cook food. In addition, in order to maintain the heat it is often necessary to cover the pots with one or more layers of cloth or other material. The hotplate maintains a constant low heat output which is not influenced by whether more or less pots are placed on it (since there is no thermostat present).
Some of the newest models of hotplates have a dual setting, one for cooking and one for maintaining a low heat level. This type of hotplate is more complicated in halachic terms.
Why is halachic approval needed for a Shabbat hotplate? First, there should not be a thermostat controlling the temperature according to a dial setting, because if a thermostat is present placing a pot on the hotplate has a direct effect on the heating element. In addition, there should not be any way to regulate the heat output using an external switch or dial. If such a dial exists, The Zomet Institute insists that it be covered to render it inaccessible on Shabbat.
Ashkenzim allow putting hot solid food on a hotplate on Shabbat only if something is placed between the hotplate and the pot, such as an inverted plate or the cover of a pot or a jar. Sephardim, on the other hand, permit placing a pot with cooked solid food directly on the surface of the hotplate.
Read more on this subject:
The Electric Hot Plate on Shabbat, Rabbi Sinai Adler, Crosroads 1 page 247