The legendary Space Sword is the second talisman to appear and a symbol of energy and strength. It's appearance as a weapon embodies the nobility and responsibility of the one who wields it; thus, it is given to Uranus, the powerful warrior with the ability to unleash the LSS's power properly.
We first see the Legendary Space Sword in Act 28 of the manga. The Witch Viluy and Sailormercury battle outside of Mugen Gakuen as Haruka and Michiru watch one. 
When Mercury falls to the ground and Viluy begins to deliver her final blow, H&M intervene and transform. Uranus then calls up on her "demonic talisman" to "show thy power and protect [them]." The sword materializes before her hands, and she uses it to slice Viluy. As they run away "in a gust of wind," Sailormars wonders if Uranus's space sword is the second deadly talisman.[1]
It's odd to see Uranus's call her talisman demonic.[2] The MiXX translation calls is her "magic item" but "demonic" may fit better. For one, LSS seems to draw some energy from Uranus, seeing as she must ask for it's power. A "demonic" sword would probably be extremely powerful as a weapon but have to drain that power from the user. We also see how flexible the sword is. The blade itself is not solid and can extend from very small to very long, probably depending on how much energy is given up in exchange.
In Act 31 we see even more of the LSS's power. The Outers are blocked from entering the Mugen Gakuen, but Uranus's uses her Space Sword Blaster to break the barrier after she senses the Princess in danger. The force and strength of the sword appear to be influenced by Uranus's emotions. She's able to release a mass amount 
of power when danger lurks in the air. I don't think she could've shown this much passion if she maintain her cold demeanor from the Infinity arc. This is another connection between the energy of the user and the energy of the "demonic" sword.
There are only a few instances in the anime where we see the LSS in action; and all of them focus on the strength and swiftness of the sword. In the SuperS movie, we view how quickly Uranus's can slash and enemy before they can attempt to retaliate. In Episode 124, the LSS leaves her hand as a projectile and uses its shape as a sword - rather than its power - to destroy a daimon. But, in Episode 197, we see the LSS crack in the hands of Sailorgalaxia and become useless. It appears that once you break through the windy cover around the sword, you can shatter its power by breaking the blade itself.
So, though the LSS is a powerful wind sword, representing the courage one must have in order to win. It's demonic energy is dangerous, perhaps sapping, but that is the cost of pure power. No wonder the Death Busters wanted it so much!
1 Act 28. Infinity Arc. Sailormoon Manga.
2 Sailor Moon - Act 28. The Manga of Takeuchi Naoko. Kurozuki's translation.