With installation costs in the millions of credits, the Vanish 2 was extremely expensive; though was considered a comparatively far cheaper and practical method than a cloaking device. The Vanish 2 worked like most sensor masks - when activated, the device monitored the sensor conditions around the ship (Radiation, comm signals, visible light, sensor pings, etc.) and then re-emitted these signals instantly on the other side of the ship. This fooled sensor scans into seeing a single and uninterrupted section of space - and allowed ships to operate extremely close to sensors and scanners without being detected.
The device wasn't foolproof however, visually the ship could still be seen, and extreme emissions from within the ship itself (and thus within the sensor mask) were capable of being detected despite the mask. Because of this, the device was often coupled with engine baffling and other stealth techniques - making the ship essentially invisible.