The servo is a controllable motor that can swing back and forth or be turned to a specific position. Attach a flag to the arm to make it wave back and forth. There are even a few littleBits accessories made just for the servo (like the mechanical arm).
Note that this bit is NOT compatible with the following kits - Droid Inventor Kit - Space Rover Inventor Kit - Cross axle mechanical arm (not available separately) - Cross axle motorMate (not available separately)
For a replacement servo bit for the kits and accessories above, see the "Servo: cross axle"