you probably wouldnt use it at all, but your software will. every time you connect to a computer on the internet, whether to request a web page or transfer a file they need to know where you are in cyberspace so they know where to send the data, your IP address is basically your address in cyberspace.
All it is, is a unique number assigned to each computer connected to the internet, you probably won't do anything with it by hand unless you need to set up web serving software on your PC or stuff like that