I recall that it's added damage of elemental type, which is supported here.
The Dragon Age Wiki states that multiple of the same type also stack
. According to this thread, this applies even to damage of the same typed stacktype, such as the Frost Weapons spell andwith frost runes.
So, for example, you could do two +2 frost, and frost weapon spell, and they would all add up on top of your normal weapon damage.