Vlachos says that many gamers have incredibly powerful graphics cards that simply aren't being utilized to their fullest potential in VR applications.
In short, SteamVR will measure your GPU's speed and tell apps to render headset imagery at an appropriate resolution.
The new SteamVR Auto Resolution feature allows users to extract the best performance out of their GPU, and potentially brings VR into reach of people who are unable to afford very high-end cards. Many users are not now able to get the best out of their graphics cards, without needing to spend time manually setting resolution or other graphics settings.
If your gaming rig can't quite hit the maximum display resolution and frame rate of the Vive Pro (or future high-end headsets), SteamVR will automatically render your VR apps "at a slightly lower resolution" to maximize clarity while providing a consistent frame rate.
On the other hand, if the checks find that your GPU is struggling to render at the native resolution of the headset you're using then apps will use a lower resolution, allowing for better performance.
Now, with the impending release of the higher-resolution Vive Pro, Valve is updating SteamVR to ensure that higher-end headsets will work well at a variety of GPU power levels. Ultimately, we set the resolution based on how many "VR megapixels per second" we believe your GPU is safely capable of for the majority of applications available. This update will apply to all of these headsets and will save developers time having to check resolution against each individual headset. This new auto-resolution system takes the headset out of the equation for developers.
Valve claims the feature will lower the cost of VR for consumers, who'll no longer need to worry about constantly upgrading their GPU - assuming they already own a VR ready PC or GPU. This is exactly what most PC games have done for decades for different resolution monitors and TVs. Developers can now test their application against the GPUs they support without worrying about what future headsets will require.