What is the Steam Trade Authenticator Program?
The Steam Trade Authenticator is a brand new program from Valve designed to help combat scammers on Steam.

How does it work?
The Steam Trade Authenticator acts as a third party intermediary between two people making a trade. When items are traded to a moderator running the program, they will not be able to touch those items. Item go through the program and then are sent straight to the other person in the trade.

Why have I not heard of it before?
The Steam Trade Authenticator program is still in Alpha and only a select few trusted moderators have been included in the develpoment process.

Why does a moderator need to be involved?
Real humans act as another level of security in making sure that both parties in a trade are trustworthy. If the moderator running the program is suspicious of either party involved, he/she can cancel the trade at any time.

Why is the Steam Trade Authenticator a non Steam game?
Because the Steam Trade Authenticator is still in an early Alpha state, Valve has not yet offically added it as a Steam tool, but plans to do so in the near future.

NOTE:
Because the program is still in Alpha they may be some small problems. One of the biggest is that items may momentarily appear in the moderators inventory. This is due to a small problem with the Steam API and should be fixed in the next patch.