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A neutral (cold war) or even friendly (peace) empire cannot cross your shpere of influence or travel to systems lying within your sphere of influence once they know its there.
- that means that while scouting around an enemy empire can "stumble" into your sphere of influence because the destination system by the time it was selecting it was neutral. Once they are inside your sphere they can move around until they exit it at any point. They are unable to return inside after that without an open borders agreement.
If a neutral system is covered by your sphere of influence other empires cannot colonize it, you practically "reserve" it for later with no fear of losing it to ovexpanding enemies grabbing your land
An outpost without a sphere of influence of its own will suffer certain penalties until it becomes a fully formed colony (mouseover any of the resources to see the effect and penalties). If an outpost is covered by your sphere of influence those penalties are halved which is a big help.
Sphere of influence does NOT convert enemy systems in its radius.
Cant really think of anything else for now