Blades are one of the beginner weapons, along with rocket and stinger. They spin around in a circle. When they make contact with the enemy, it causes medium damage. Blades are useful as they can easily pop lifter balloons.
You don't have to unlock it this weapon, you automatically obtain it.
If you accidentally flip over, blades can still damage the enemy. Blades work well will sneakys and boulders. If you can get yourself behind enemy (assuming they don't have double rockets or blades) using boosters/backpedals, you can use blades to easily finish the enemy off.