It's a display feature in the "psql" client program.
Normal result:
column1 | column2 | column3
---------+---------+---------
1 | a | 9.9
2 | b | 19.9
(2 rows)
Using \x:
-[ RECORD 1 ]-
column1 | 1
column2 | a
column3 | 9.9
-[ RECORD 2 ]-
column1 | 2
column2 | b
column3 | 19.9
The first form is tabular and works well for a few columns; but doesn't work well when there are many columns, because the lines start to wrap. So you use \x for wide tables to make the result readable (but, obviously, fewer rows are shown at a time).
Using "\x auto" automatically chooses which format to use based on your terminal width.
\x in psql switches if things are like a table or a list. Before you'd have to run a query and see that you cant read it, then hit \x and then run the query again. Now you can just have it figure out which one to show you based on your terminal size