Friendly-errors-webpack-plugin enhances the developer experience in Webpack projects by transforming cryptic error messages into more readable and actionable insights. It cleans up Webpack's noisy output, presenting errors and warnings in a structured, user-friendly format within the terminal. This facilitates quicker debugging and a smoother development workflow, especially when dealing with common issues like syntax errors or missing modules. Configuration is straightforward, making it an easy addition to any Webpack build process.