This causes socat to bind to the multicast group 239.255.1.1 on the interface that has the unicast IP 10.0.0.10, sending and receiving on port 4242 over UDP, reading from stdin and writing to stdout. It basically gives you a simple chat service over the local network.
I dont think they usually use it as the web server, as they need some scripting not static pages only. The smallest server I know of that can do cgi is webfsd).
I remember trying to write a web server that can respond to requests in bash, several years ago. Since it didn't have sockets support that part was going to be handled by netcat. The problem I ended up with was that bash couldn't read and write to the same pipe. The mkfifo solution was the closest that I got to. It turns out that ksh was perfectly capable of reading and writing to the same pipe at that stage. Not long after I got stuck with bash, awk started to support sockets so I used that. Then bash started to support sockets, and many more features, so I suspect it's possible to write a solution in bash now that doesn't need netcat, but might still need a fifo.
This my defacto, PHP is installed on all the Linux servers I manage, mostly Debian/Ubuntu with DotDeb repos. You could probably get nc to pipe the output of php-cli for older PHP installs.
On Debian 7.0 (Wheezy) argument "-l 8080" without "-p" causes netcat (v1.10-40) to listen on a random port.
I must run "nc -l -p 8080" to listen at 8080.