1) Remove/freeze "bloatware"...factory-installed apps like Amazon, Zappos, etc.
2) Install custom ROMS. (Tweaked Operating Systems).
3) Do screen shots(for phones that don't do that already). Don't believe there are many that don't now.
4) Access the inner bowels of the beast
. Yeah, that is meant to be funny.
5) Tweak the speed the processor runs. But hey, with new phones and 4g....
6) Create backups of apps and settings so you can go directly back to that if you ever have to wipe your phone clean.
There are many more reasons but that is the main stuff.
Any more I don't have a need for it although I ran the DroidX through it's paces
Google: reasons to root Android. You will find a lot of stuff there. If you want to feel real dumb, read the Root Section in the DroidX forum. OMG that phone was exploited to the max!