I wonder what this Negg does to your Neopet?
This item can do lots of things - TNT said them all themselves. From the Neopian Times Issue 118 - "Changes your pets gender, turn them into a Lenny, Tuskaninny or Moehog, boost their intelligence, raise their hit points or cure any disease your pet may have".
Hit point increase coincides with intelligence increase for a +2HP +5Int. This is just a single test, however.