The command ip nat inside source list 10 interface FastEthernet0/1 overload enables NAT on the router, allowing multiple hosts on the internal network connected to FastEthernet0/2 to share a single IP address (the one assigned to FastEthernet0/1) when accessing the Internet. This is known as PAT (Port Address Translation), part of the NAT process, which helps conserve IP addresses and allows multiple devices to access the Internet using one public IP address.