It basically tells spiders which pages you want them to avoid crawling. You don't necessarily need a robots.txt file. And you can do a lot of damage if you put in a bad entry. Unless you have a specific reason to block spiders from parts of your site, then you don't need to worry about robots.txt too much. Worth reading: http://en.wikipedia.org/wiki/Robots_exclusion_standard
Id stay well away from it just incase you dont google to stop crawling your sight because altered this file. As usual Wiki is prob your best resource for a quick eplanation.