You would like to know what the words 'penetrating insight' mean. To explain this, let's break the words down:
'Penetrate' means 'to enter' or to 'pass through'.
Here are some examples of the ways that the word can be used in a sentence:
"The bullet penetrated the man's shoulder."
"The skewer was used to penetrate the marshmallow."
"She saw a thick fence post penetrating the ground."
In all of these examples, the penetration is a real world event. However, the word can also be used metaphorically, like this:
"His eyes penetrated her back."
Of course, eyes can't really penetrate anything, but they can metaphorically penetrate.
The dictionary definition of penetrate is: Here: http://dictionary.reference.com/browse/penetrate
The word 'insight' refers to a very precise ability to understand something, whether that something is a person, an object, a concept or a situation.
Insight is defined here:
http://dictionary.reference.com/browse/insight%20?s=t
So, 'penetrating insight' is insight that metaphorically bores to the very heart of the matter. The phrase is used when someone seems to understanding or perceive a situation incredibly accurately.