The casket is powered by a limitless supply of magical energy. When opened, it releases powerful arctic weather that is capable of freezing anything in its path; killing humans and immobilizing Asgardians. The Casket can only be opened and handled by a Frost Giant; anyone else who attempts to open it would be burnt by the powerful cold aura that surrounds it. Its magic is also strong enough to temporarily disrupt the powers of Odin.
In the Film
In the film, the Casket is used by the Frost Giants in an attempt to take over the Nine Realms, starting with Earth. When the Frost Giants are defeated by Odin, the All-Father takes the casket back to Asgard for safekeeping. He later displays it to his two young sons; Thor and Loki, when he is telling them stories about the war with the Frost Giants.
Prior to Thor's coronation as the new king of Asgard, the casket is almost stolen by several Frost Giants who have managed to enter the castle armory where the box is kept. The theft is sensed and stopped by Odin who calls the Destroyer to defeat the thieves.
Later in the film Loki discoveres that he can handle the casket without being harmed. The casket also temporaily disrupts Odin's magic; causing Loki's true Frost Giant physical charictaristics to appear.
Loki would conceal it with magic and used it to freeze Heimdall.