The Locket is a small green object with pot like shape. Oliver wears it like a necklace.
As stated above, the Locket is used for storing and releasing pieces of hearts. Oliver can take a piece of heart from a person with extra pieces of a specific virtue by casting Take Heart. He can then give the stored piece of heart to a person who is missing that piece of heart by casting Give Heart. Note however, that you can store only one piece of a heart of a specific virtue. Furthermore, you can only borrow a piece of heart once.
Virtues are the elements that make up a heart. There are 8 different virtues can be stored inside the locket, and all have something to do with the main storyline. These virtues will be unlocked when you progress through the story.