Since I have incontinence, I can tell you.
I've never heard of them being used to attain orgasms, but they are meant to help people who have incontinence.
Incontinence happens when the muscles of the pelvis are weakened, meaning it becomes harder to, basically, "hold it in" when you have to go to the bathroom. It also makes it hard to hold it in when you laugh or particpate in physical activity. (Basically, you urinate when you laugh very hard or are doing something physcial, but since your muscles are weakened, you can't hold it in, and believe me, it's quite annoying...)
You pretty much hit the nail on the head. Kegel excercises are basically contracting the muscles, holding them, and releasing. This helps strengthen them, making it easier to "hold it in". (Though I've never heard of them being used to attain an orgasm)