The Transformer Upgrade is used to upgrade a machine to the next higher tier of input power. Upon placement in an upgrade slot on any IndustrialCraft 2 machine, it will increase that machine's input tolerance up to the next tier.
Be sure you apply the Transformer Upgrade(s) to your machines before connecting a higher tier power input to them. Connecting the power before you apply the upgrade will result in the machine's explosion.
Also mind in SMP players can fiddle with machine upgrades despite zone protection. The result is a cascade of exploding machines.
One upgrade enables a tier 1 Low Voltage (32 EU/t) machine to accept a maximum current of 128 EU/t (Medium Voltage). Two upgrades will allow the same machine to accept a maximum current of High Voltage (512 EU/t). Finally, three upgrades will allow a simple Macerator to accept Extreme Voltage current, a whopping 2048 EU/t. Putting in a fourth upgrade will not allow a machine to accept higher than Extreme Voltage, such as from a Nuclear Reactor. It will blow up regardless of the upgrades, making four upgrades in one machine completely useless.
Transformer Upgrades do not alter the speed at which machines complete processes.