Om namo bhagavate vasudevaya is known as a Mukti, or liberation, Mantra. It is a potent spiritual formula for attaining freedom. Consistent use of this mantra will eventually, even if over many incarnations, free us from the cycles of rebirth. In this way it mitigates Karma so we are free to make true choices in our lives. True choices, not simply reacting to desire and aversion.
Om is a seed sound for the sixth, or brow, chakra and is the name of the state of existence in which the Indweller (jiva, atman, or soul) has united with the spirit of the all-pervading consciousness.
'Om Namo Bhagavate Vasudevaya' is a mantra of Bhagavan Sri Krishna. It means literally: "Prostration to Bhagavan Vasudeva." 'Surrender to Sri Vasudeva' is implied therein. Now, the prostration, salutation, is an external symbol of the internal union. When we do namaskara to a deity in the temple, to a friend or any person, we join both the palms and bend ourselves low. This namaskara, and the joining of the palms are indicative of the feeling of union of oneself with the other. "I and you are one" -- that is prostration, that is namaskara. "Bhagavan Vasudeva, I am one with you" is a spirit of surrender, and here begins meditation on Bhagavan Vasudeva. When this mantra is chanted you have also created the requisite atmosphere in the mind for contemplation on Bhagavan Vasudeva, to begin meditation and to feel His presence. This rule applies to all other mantras, also.