This is a tool used to spawn FastCGI processes so that any FastCGI application can be interfaced with Cherokee. This is, for example, how PHP is supported in Cherokee, though in PHP's case you do not need any knowledge of spawn-fcgi since it is configured by default.
It supports many parameters, but there is not much to be added to the information about arguments supplied by the programm.
This is the full information provided by the manpage.