The enemy radar is a special cube that points towards the nearest in-range enemy and shows all in range enemies on the mini-map. When not in-range the radar will spin around, searching for an enemy.
There are three radar levels, each 4 tiers away from the previous (starting at T1): T1, T5, & T9. (No longer the case as the game has moved to a level based unlock system.)
The radar can be placed in any orientation and is commonly used to assist in map awareness. Radars of all tiers make it much harder to be ambushed, vastly easier to hunt down and ambush hiding enemies, and assist in preventing being dive bombed by flying robots.
Enemy Radars can be jammed by enemy radar jammers, hiding them from detection.
You can stack Enemy Radars to counter jammers.
Upgrading the enemy radars may seem useless, because each upgrade only increases the range by a few meters. This, however, can actually be effective. If you are trying to be stealthy, having the highest possible tier enemy radar will help you. Why? Lets say you have a T5 on your ship, allowing you to see a little farther than a T1. This means you can detect an enemy a bit sooner than they will detect you. This gets a bit more complicated when radar jammers are factored in, but for the most part, seeing the enemy just before they see you can allow you to back off out of sight, or ambush them.