The only thing that it does do - a great writeup from Ars Technica:
Homeopathy successfully turns water into a placebo
After a thorough evaluation of 57 scientific reviews that encompassed 176 studies on 68 illnesses, a panel of health experts has once again concluded that homeopathy is at best a placebo (when it's not being potentially harmful).
Homeopathy, which one of the panel members referred to as a “therapeutic dead-end,” is based on the idea that “like cures like” (a questionable proposition to start with). Thus, its practitioners claim that if you take a substance that causes a sickness or similar symptoms of a sickness, then dilute it—to the point where the result is plain water—you create a cure. There's no mechanism that can possibly explain this, but some tout the idea that water has memory that can retain therapeutic information after dilution has removed every last molecule of the “healing” substance.
The down side:
But there is potential for homeopathy to injure patients, according to the expert panel, the Australian National Health and Medical Research Council (NHMRC).
“People who choose homeopathy may put their health at risk if they reject or delay treatments for which there is good evidence for safety and effectiveness,” the NHMRC concluded.
In a blog post, one of the NHMRC members, evidence-based medicine expert Paul Glasziou of Bond University, said he was “shocked” that homeopathic practitioners promote homeopathy treatments for infectious diseases like HIV/AIDS and malaria.
I have met some homeopathic physicians and I always ask them if they feel any remorse for pushing such a worthless system of healing. Do they not feel shame for delaying or preventing the successful medical treatments of their patients. Delaying their treatment until the disease just gets worse.
There are a lot of alternative medical systems out there that just simply work. I have had successful treatment with Chinese medicine - drugs and acupuncture. I am learning about (and growing and making) herbal remedies. The idea of using diluted toxins in water is simply ludicrous...

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