Whereas the sustain pedal on the right hand side of the pedal row on a piano sustains the notes of a piano. It sustains every note you play once pressed, merging them together. A sostenuto pedal makes the first notes played sustain and everything else plays without sustaining them.
Usually played to sustain bass notes as a short or long drone underneath the melody or chord/melody right hand pianists playing.
You do not need the sostenuto pedal to play grade pieces as it is not on most pianos. It is not on the majority of new grand pianos. We find the pedal useful if the pianist makes time to learn how to use it, it can make slight alterations in the tone and players expression. Some styles use it more effectively or regularly.