Simulating Earth gravity is (unfortunately) not nearly the same thing as generating artificial gravity. Instead, a gravity simulator generates resistance that is similar to the amount of resistance that you experience due to gravity. So for example, here on Earth, it takes effort to lift a weight, because gravity is pulling the weight down. In space, you don't have to fight against gravity, you just have to overcome the weight's inertia, which is much easier. If you were to attach an elastic strap to the weight, though, you could simulate having to apply that extra effort, even in weightlessness.
Why would anyone want to ruin the ease of weightlessness with a gravity simulator? Well, besides the health problems that can crop up from long exposure to microgravity, even the simplest of tasks take on a whole extra dimension when your body doesn't weigh anything. If you pick up an object, you'll also be pulling yourself down towards that object. If you try to twist a screw, your whole body may start to rotate. With practice and the right equipment, astronauts can get used to all this weird stuff, but NASA wants to make things much easier by designing a new spacesuit that can turn people into relatively stable platforms, like gravity does.
To make this work, the new suit will have an inertial measurement unit that can detect small angular changes. Flywheel gyroscopes will then kick in to provide simulated gravity resistance along any axis, potentially allowing an astronaut to "plant" themselves in microgravity to operate a tool. Off-orbit, the same kinds of technologies could be used for medical rehab, and Draper Laboratories hopes to have this kind of tech inside spacesuits in five to ten years.
Draper Labs, via Space-Travel.com