Butter becomes ghee when its moisture is boiled off, converting the butter's long chain fatty acids to short chain fatty acids. This process makes the ghee entirely digestible, whereas conventional butter is harder to digest and therefore gets stored up in the body. Because it is entirely digestible, the body then enjoys its benefits.
Generally, ghee serves the body by being a source of nourishment and lubrication. As the body gets older, it dries out and becomes less sturdy (decreasing of bone density, etc.). Ghee helps the body to regain this sturdiness, and also moisturizes the inside of the body so as to prevent constipation and dryness. Ghee can also be used topically and in orifices to strengthen the eyes, the ears, the nose, the skin, and other aspects of the body.