There is no impact when swimming, so there is a lesser risk of injury. It is also great for joints and flexibility as swimming requires you to constantly stretch as well as strengthen. While it will build up fitness, it will also build up power and physique as swimming develops longer, leaner muscles than lifting weights.
What it works: cardiovascular, endurance and all major muscles group are worked and improved.
Most people don't have the technique or ability to swim for long enough to do a proper work out. Even if you can swim well, it's worth getting some lessons to ensure you are swimming properly enough to improve your condition.