It fires a little 5.7 x 28mm round at a high rate and muzzle velocity. FN Herstal claims an effective range of 250-300m, but 150m is a more realistic number.
See also the FN P90 page. David Crane has written reviews of the P90 at both Defense Review and Military.com. See his comments re. the claimed and reported effectiveness of the 5.7x28mm round in the continuation. What it may lack in single-shot effectiveness, it compensates for with a high rate of fire.
As the ammo link above notes, the armor-piercing round can defeat helmets and body armor at short ranges. American civilians can only buy ammo with greatly reduced capacity and resulting shorter, more arcing trajectory (see ballistics chart at a link above). See this FN page for ammo available to Military/LE and civilians.