It keeps them close to you, they can smell you and keep warm off your body heat. They might be lulled into longer sleep because of your movement. You can have both hands free.
the downsides are, it might be a bit much for your back, and shoulders. the baby might fuss a bunch getting in and out of the carrier. also, if you overdo it, they don't get a chance to stretch and build up their muscles, or do the all important tummy time.
it didn't work well for me, but my father loved having our DS in the ergo, and later the kelty and pacing him into a nap from 1 month - 4 months.