The incremental model is a process where software development is divided into standalone modules, with each module going through requirements, design, implementation, and testing phases. Each subsequent release of a module adds additional functionality until the complete system is achieved. The key phases are requirement analysis to identify needed functionality, design and development of system functions, testing each existing and new function, and implementation through coding and upgrading the working product. The incremental model is best for projects with lengthy timelines, less skilled teams, or customers wanting early access to prioritized features.