It has a couple of purposes:
Originally only one zero car (number zero) was used. These days it is not unusual for a rally to have two or three zero cars (numbered 000, 00 and 0).
The drivers are usually retired race drivers. The cars can be ordinary production sport cars, old race cars (which lost homologation or are simply no longer competitive) or even new models (which the manufacturer wants to test before the homologation). The driver and co-driver wear normal safety equipment (helmets, racing suits, etc.). The zero car is usually driven at almost race pace.