It's used to flesh out the story of your character...his thoughts and his goals, so forth. The GM's can see what you have going on with your character without having to be on top of you in-game all the time.
I use mine as a diary...lots of people do this. Others write it out like chapters in a story. Give some of the threads a read to get an idea of what you might want to put forward in yours.
*I just read them 'cause there are some good writers on here:)*
