MPE is a backwards-compatible extension of the MIDI spec that increases the expressive power of controllers and software instruments. In practical terms, what MPE does is use a dedicated MIDI channel for individual notes. So, for example, if you play a chord on an MPE controller like the Seaboard RISE, you can control modulation and pitch bend separately for each note in the chord. The latest Bitwig Studio beta (v1.2) implements MPE and has native support for the LinnStrument and Seaboard MPE controllers.
Geert Bevin, a musician, engineer (currently at Moog Music) and author of MPE, has a great video that uses MIDI Monitor (similar to MIDIPipe, but MIDIPipe lets you rewrite MIDI messages on the fly) to show what MPE MIDI data looks like. He also demos using MPE with the Linnstrument and Cubase.
(Also, if you’re interested, the MIDI hat is available from midi.org.)