As Wikipedia explains it: (Click here for the full entry)
It is a naturally occurring mineral that is purified and processed into either granular or beaded form Silica gel’s high surface area allows it to absorb water readily, making it useful as a desiccant (drying agent). Silica gel is non-toxic, non-flammable, and non-reactive and stable with ordinary usage. Basically, it is a natural combination of water, sand and oxygen that is shaped into various sized beads.
It is similar in feature to a sponge because it absorbs a lot of liquid and moisture. It is different than a sponge because it does not become soft or wet – silica gel keeps its shape and stays dry to the touch.
Once saturated with water, the silica gel can be regenerated by heating it to 120 °C (250 °F) for two hours.
Long term exposure to crystalline silica dust can cause silicosis according to OSHA. Silica gel crystals are completely different and do not cause silicosis and are safe for cats and humans.
Silica gel crystals make an outstanding cat litter because it absorbs moisture, instantly trapping odor-causing molecules inside internal channels and then releases the excess moisture so the crystals can absorb again.
MOBILE PHONE RX: If your cell phone is ever exposed to excessive moisture (dropped in water for instance) then silica gel crystals could save your phone. Quickly dry phone as much as possible and remove the battery. Place the phone (or computer) inside panty hose, a sock, or a pillow case. Completely surround the phone and its fabric wrap in 5-10 lbs of silica gel crystals. Leave the phone inside the silica gel crystals for 24-48 hours. Remove phone and vacuum any small crystals from the phone’s surfaces. Reinstall battery. Not a 100% guarantee this will work, but there are kits on the internet for saving phones using silica gel crystals for 5X the cost of silica gel cat litter.
Silica gel is also used as a preservation tool to control relative humidity in museum and library exhibitions and in cigar humidors. It may also be found in medicine bottles, hospital sanitation kits, or to keep tools from rusting.