Before using, please read the following Q&A.

Q: Will this void my warranty?
A: Yes. Flash at your own risk.

Q: Can I use it?
A: Yes, if you're on any 4.4 ROM.

Q: How does this work?
A: This patch consists of two files that include optimized bionic and Dalvik libraries for any KitKat ROM.

Q: What is bionic?
A: It is a vital system library that provides i.a. basic math and memory access functions to every other library and application in Android.

Q: What is Dalvik?
A: In short, Dalvik is a virtual machine in which every not-native-code app runs. You can read more about it in a Wikipedia article.

Q: How do I benefit from this patch?
A: In two ways: bionic patch provides faster memory access and optimized some of the math operations, dalvik provides optimized Dalvik Virtual Machine library that allows faster code execution.

Q: Do I need this patch?
A: It depends on what ROM you are using:
if you're on stock ROM, you'll benefit from flashing both bionic and dalvik patches,
if you're using a custom ROM, you most probably don't need bionic patch, as these are already included in most custom ROMs. You'd benefit only from flashing dalvik patch (if it's not already included by your ROM maintainer, of course).

Q: Why aren't these patches included in stock ROM?
A: As for bionic - I don't know. Maybe that's because Google didn't want to include vendor-specific optimizations in AOSP or maybe simply because Qualcomm never posted them in Android Code Review to be merged. As for dalvik - because they are closed-source. Here'a a good explanation by @xboxfanj:

Originally Posted by xboxfanj
Part of the point of Nexus devices is that AOSP can produce nearly identical images minus GApps. Google would not use a proprietary dalvik as that is one of the core libraries. Using a proprietary dalvik would undermine AOSP. Although, an open libqc-dalvik or even just giving us that binary would be nice. Google could have a device specific extension similar to the adreno extensions onto renderscript and egl for dalvik. Proprietary dalvik won't happen, but an adreno extension could be cool.

Q: Where do these patches come from?
A: These have been authored by Qualcomm. Bionic patch comes from Code Aurora Forum, Dalvik library has been extracted from Moto X 4.4. ROM. Another good read by @xboxfanj:

You will see that most of that change is supporting other libraries (libqc-opt and libqc-dalvik), which is where their optimizations are. Unfortunately, both of those are closed source. libqc-opt is included in QCOM ROM zips as a shared library, so we can use that, however, libqc-dalvik is a static library, so we can't pull that from anywhere, as it is included in the libraries themselves and not put in system. This means that our only option to get all of Qualcomm's dalvik optimizations is to use their binaries rather than building from source, since building from source would mean missing any optimizations brought by libqc-dalvik, libqc-sqlite, and libqc-skia (the last two haven't been included in any patch, but are QCOM static libraries).

TLDR: QCOM's dalvik optimizations are closed source, so we are forced to use their binaries.
Remember to thank @xboxfanj for his very useful posts!

Q: What is the reason for including installd file?
A: The installd binary is from stock Nexus 4 ROM and is included for compatibility with CyanogenMod and CM-based ROMs. This is because CyanogenMod changed installd to work with their dexopt-on-cache and if you don't flash stock installd you'd get hundreds of FCs and unusable ROM.

Q: How do I use this patch?
A: Simple flash it over your current ROM in recovery. Remember to wipe Dalvik Cache after flashing. Full wipe is not needed.

Q: How do I revert?
A: Simply flash over your current ROM and wipe Dalvik Cache afterwards. Full wipe is not needed.

Q: Can I flash it over an ODEXed ROM?
A: Yes, but it is strongly recommended to use a deodexed ROM if you want to use Dalvik patch.

Q: How will this affect my battery life?
A: It will be at least the same, if not better. Better performance = less CPU time spent on calculations = better battery life.

Q: I don't see any performance gains in some app, why is that?
A: The dalvik patch doesn't affect apps that use native libraries, i.e. you won't see much performance gain in Chrome etc.

Q: I'm on X kernel, can I use it?
A: Yes, use it with any kernel you like.

Q: Can I use it on other devices?
A: Yes, you can use this patch on every Krait device that uses AOSP-based ROM (examples: Nexus 5, Nexus 7 2013). Don't flash it on stock ROM on non-Nexus devices, as they already include these optimizations (that includes Galaxy S4 and HTC One Google Play editions!).

Q: What if I use it on stock ROM and OTA arrives? Can I install the OTA straight away?
A: Not necessarily. Any modification to stock ROM can mean problems when installing an OTA. You should revert to fully stock ROM to properly apply an OTA.

Q: Can I use ART with this patch installed?
A: Yes, but you won't see any performance gains. In fact, with this patch Dalvik is faster than ART. I suppose ART will supersede Dalvik in performance in the future, but not yet.