Panels is a layout framework for Drupal that allows for complex and customizable page layouts. It solves problems with sites that require multiple or complex layouts on different pages. Panels uses a drag-and-drop interface to position content in different regions and can export layouts as code. It integrates with modules like Features and provides an extensible API for developers. While it has a learning curve and has had bugs, it allows for powerful and flexible page designs in Drupal.