Mmm, cheese-flavored petroleum!
Velveeta is a very strange food-like substance. It is similar in texture to drywall mud, only it's cheese-flavored. It is chock-full of trans fats, which would just as soon kill you as look at you. It's nasty, horrible, unhealthy stuff. However, it melts like a dream and is a pretty critical step in the whole Crackaroni & Cheese recipe. Otherwise, your cheddar will just be all glumpy and oily looking.
Glad you asked, aren't you?