Softboiled restores half of the user's maximum HP, but you can also use it outside of battle to restore some HP of another Pokémon in the party, at the cost of its own HP. Not a bad reward for a short swim, but you can only teach it to a Chansey.
You'll receive TM41 ( Softboiled) from the private resident. Once you gain the Surf ability from HM03, you'll be able to float across the little pond in the center of town on a Pokémon's back.