It's basically a reverb effect with some extra features that is specially designed for producing PsyTrance tracks, but I can't see why it couldn't be used in other musical genres.
Just did a quick experiment with an amp sim plugin, a speaker cab sim plugin and the Psychedelic Tunnel plugin just to see how the Psychedelic Tunnel plugin works for guitar signals, the result is that yes you can not only use it with synths, you can also use it with guitars (clean sounds seem to get the best results), I got some pretty interesting spaced-out guitar tones with it, so if you're interested in doing space rock or psychedelic rock, this plugin might be what you're looking for, sometimes using effects in genres that they aren't normally designed for can yield some interesting results, this reverb plugin may also work for psychedelic slide-blues too.