The Norton Prep Stone for Waterstones is an artificial stone used for raising a slurry on fine grit finishing waterstones. It is also known as a "synthetic Nagura stone". Made of aluminum oxide, it measures 3/4" x 3/4" x 3".
The slurry is what does the cutting and polishing and the Prep Stone speeds up the slurry making. After wetting the waterstone, rub it evenly with the Prep Stone. This will create the slurry, even off the high spots, and make for less frequent flattening of the waterstone.