I was intrigued by this upgrade when it was first announced. It can be very effective increasing the threat range of slower squadrons and can help with early fighter strikes.
This card is available to the Galactic Republic faction and uses an Offensive Retrofit upgrade slot. It is currently available to the Acclamator-I & II, Pelta-Medical and the Venator-I. The other Pelta and Venator may be able to take it too, we shall see. The card gets better with a higher squadron value. For only 3 points, even the Pelta-Med can consider taking it. Ships with double Offensive Retrofit slots can pair it with Expanded Hangar Bay to increase the squad value by one and let you scout with an extra squadron.

Scout: While deploying fleets, you can be placed outside of deployment zones and do not need to be at distance 1–2 of a friendly ship, but must be placed beyond distance 1–5 of enemy ships or squadrons.
The Scout rule allows you to place squadrons anywhere outside distance 1-5 of an enemy. If you are first player this can be literally anywhere on the board if you do it as your first deployment. In later deployments, as enemy units appear, your areas start to reduce. If the enemy have Hyperspace Rings too you may be in a race to place a squadron and get a corresponding "do not scout here" bubble.
Which squadrons to give scout. You can determine this after seeing the enemy fleet composition and have determined first player and mission. In a tournament you are free to change your scout options each game. Granting scout to your slower squadrons is the more usual option. ARC-170s are probably a priority as it gives them a head start and your faster escorting fighters can catch up in the turn one squadron phase. Speed 3 and 4 squadrons could be given scout to try for a turn one alpha strike or to engage and stiff arm some Vultures well away from your Y-Wings and let them focus on ships unmolested.
When to scout. You can place the scouting squadrons down early to delay placing your first ship and take advantage of more open space. Alternatively you can keep your scout squadrons until much later in deployment to see enemy positions, speeds & headings and then plan a route of attack accordingly.
Where to scout. There are so many options here that I cannot give a complete answer but there are several factors to think about.
Mission: Some missions have areas where points can be earned by grabbing tokens or staying close to a certain obstacle etc. These give a hint as to where the action is going to be and will influence where you may wish to scout some squadrons. If the GAR ever get a squadron with the strategic rule they could scout and move objective counters nice an early.
Player: Even in more free flowing missions without tokens to take such as Most Wanted, Planet Ion Cannon or Solar Corona, the scouting position is important. If you scout early you may not know where the enemy will be so as first player you risk the enemy just shifting to well away from those squadrons making them irrelevant for 3-4 turns. As second player you know the enemy will have to approach you and so can place scouts in the knowledge of where you are likely to place ships later.
Terrain: With the changes to Intel in Armada v1.5 sitting a squadron on an obstacle is often the next best thing to the old rule. You are obscured and cannot be engaged allowing you to leap out and attack the target of your choice.
Enemy position: Delaying deployment of your scout squadrons a little can get you a look at enemy ship deployments and then you can formulate a plan and deploy your scouts.
Relevance: Be careful placing your scouts too early if you don't know the enemy positions or intentions. Don't get ignored.
Overstretch: Don't scout too far ahead if you can't get near to them with supporting units. A carrier with Flight Commander or Boosted Comms can activate scouting squadrons from further out. The strength of the enemy fighter force is important as to how aggressive you can be in your scouting. 3 ARC-170s very close to the enemy deployment zone may sound great but if the enemy have 8 Vultures as yet undeployed you may be just giving away early kills. Note an enemy squadron can be placed within distance 1-5 of a scouting squadron if they are not using the scout rule and are within distance 1-2 of a ship so you could find your scouting ARC-170s engaged before turn 1even begins.
Substitutes. Other ways to get more speed from your squadrons.
All Fighters Follow Me. Increasing the speed of squadrons activated by squad commands this turn. The Venator has a Fleet Command slot and there is always the Flag Bridge option but that means you can only do AFFM once (which will often be enough).
Fighter Control Teams. A Support slot and a reasonable squadron value are needed to shuffle slow squadrons along on turns 1-2. Flight commander can be a nice combination.
Independence. (only joking).
Reserve Hangar Deck. Keep the fighters on board a reasonably fast ship and release them on later turns into action. Note adding squads to the RHD ship takes them out of being used in the deployment phase to delay placing ships. Hyperspace rings doesn't do this.
Example Fleet
399/400, Surprise Attack, Asteroid Tactics, Infested Fields.
Consular C70, Linked Turbolaser Turrets, Luminara. 77
Acclamator-I, Flight Controllers, Ex Hangar Bay, Boosted Comms, LTT, E-Rax, SFO, Nevoota Bee 98
Acclamator-I, Flight Controllers, Ex Hangar Bay, Hyperspace Rings, LTT, E-Rax, SFO, 92
4 x Delta-7, 3 x ARC-170, Anakin Skywalker. 132
One of the Acclamators has Hyperspace Rings and can scout the 3 ACR-170s and Anakin. Nevoota Bee will probably deploy within Boosted Comms range of them for a possible turn 1 Squadron command. These fighters have plenty of hull and counter(1) so can look after themselves at least until the Deltas arrive with Flight controllers Adept(1) and Nevoota swarm bonus.
LTTs are great for dice modification and can each victimize a squadron if needed to tip the fighter battle early along with 2 sets of flight controllers and some missions with either squadron raids or space slugs going chomp.
SFOs are for slicer tool insurance and maybe the odd emergency Nav or Repair command. External racks are again Flak victimizer or close range punch if the enemy get through the bombers.
Nose Punch!
A speed 4 squad can hit a ship at distance 5. Turn 1 attacks if you can figure out how to activate.
Now where is Titus and grav wells?