It can be used for a lot of purposes actually.
First is that it's used to get stuff out of the tank. Any hangon or drop-in type stuff can be a lot easier to get to and do maintenance on if it's in a sump vs. in the tank.
Another is that it can be used to increase your water volume. For me, that's definitely a good thing since I only have a 30 gallon tank. (More water volume generally = more stable tank.)
Sumps don't have to be made into direct filters themselves, but if you choose to you can. I think most people on here probably run something similar to what's called the
Berlin Method.
From everything I've heard, if you're planning on doing a reef, you might want to (almost) pitch the Magnum. If you're going to do fish-only feel free, but the term I've heard them called is "Nitrate Factory" (not a good thing).
I picked one up to start with recently (thinking that I'd start my tank as fish-only then after it's cycled and stable I'd switch it to reef. - BBZZZT! Wrong. There's a
HUGE difference between a reef tank and a marine fish-only.
Anyway... - For the most part, a sump is to get equipment out of the main tank and to add water volume.