What is this and what does it do?
Found a vacuum hose lying around doing nothing, so I assume it goes here?

 

That's part of the fuel vapour recovery system. I just gutted this out of my car. It goes to the fuel vapour canister which is in front of the front left wheel. Theres some more info in the thread "Eliminating Vacuum Lines"

 

Great thanks ... a job to do, in the bin come winter!
Bit like game of Thrones .... winter is coming!