This phrase has been the subject of much dispute. As a result, there are a number of theories.
Some take it to mean that Christ, subsequent to his death, went to the locality of hell, where OT saints were said to be waiting and set them free so that they may, at long last, enter heaven. This interpretation, which is held by RCC and some Protestant churches, is based on an errant understanding of 1 Peter. 3:18f (For a sermon dealing with this passage go to our series on 1 Peter).
Others have taken this statement "He descended into hell" to be a reiteration of Christ’s sufferings on the cross, this time pertaining to the mental agonies that he endured.
Perhaps the best way to understand this phrase is that Christ remained under the power of death for a time. The word hell is the word Gehenna, which indicates the grave (i.e. he remained in the realm and under the power of death). It’s positioning in the Creed, after buried, seems to indicate such.
What then is the purpose of this statement? It serves to remind us that the full penalty of death was paid by Christ. Christ not only died, but he remained under the power of death for a period of time. Thus, he bore in full the penalty of sin.