The sensor masking system installed on the Valhalla was a two-part project developed at the Starfleet Tokyo R&D facility.
This device is essentially a "Poor Man's Cloak", designed drastically different from a true chroniton-based cloaking device like the Romulans' and Klingons', but it still achieves the same, if somewhat lessened effect.
The field is capable of masking the Valhalla from passive sensor scans, however, it can still be seen with the naked eye. If a more thorough scan in the direction of a ship bearing the masking system is done, it may receive an anomalous reading, but the target ship would still look like normal background radiation.
This system makes it somewhat more difficult for enemy ships to gain a target lock on the Valhalla, giving it a slight advantage during fights. Maybe a few seconds, maybe a few more when maneuvering.