From the Super Mario Wiki
Team Healer is an item introduced in Super Smash Bros. Brawl that only works in team battles. In normal free-for-all battles, the item is useless. When collected, the Team Healer does absolutely nothing to the collector. However, with careful aim and teamwork, the player can toss the Team Healer at their teammate, which will recover that players health. The more damage the player has taken, the more health is recovered.
However, if the player is careless, or the teammate is not prepared, the tossed item may fall into the hands of an opposing player. Sometimes it might damage the opponent or it may lower the opponent's damage, so the player must be careful about where he or she's throwing this item.
The Team Healer item returns in Super Smash Bros. for Nintendo 3DS, and will later appear in Super Smash Bros. for Wii U.
Trophy information from Super Smash Bros. Brawl