Generation III - Prevents loss of accuracy.
Generation IV - Prevents the Pokémon from losing accuracy.
Generation V - VI - Prevents other Pokémon from lowering accuracy.
Outside of Battle
From Pokémon Emerald onwards, if a Pokémon with Keen Eye is leading the party, Wild Pokémon that are 5 levels or more below the user's Pokémon have a 50% chance of not being encountered. It shares this effect with Intimidate.
Pokémon with Keen Eye