It is used to balance daylight (5500K) for tungsten-balanced film (3400K). It prevents the image from appearing too blue when shooting film outdoors.
The Tiffen 85 has a filter factor of 2, which means you lose exactly 1 stop of light and must adjust your aperture or ISO accordingly.
Yes. While digital cameras have white balance settings, using an 85 filter can help preserve dynamic range in the red channel and provide a more organic 'warm' look than digital post-processing.