because mac os x is a unix-based os and thus multi-user, every file has "permissions" which tell the system which users have what privelages with that file. sometimes, these permissions get messed up, so you may not be able to execute/modify files that you should be able to. this is not always apparent, because it's mostly invisible system files and various unix bits. when these permissions are wrong, lots of little weird problems can occur, like system slowdowns, network disconnection, keyboard trouble (these are the more severe and uncommon problems, mostly it's just a slowdown). by repairing permissions with diskutility, these problems are solved.
i'm not quite sure what causes the permissions to change, but for some reason it tends to happen more frequently in 10.2 than previous versions. installing software packages can sometimes disrupt the permissions.
with 10.2.3, i have not had any problems i could attribute to incorrect permissions. i would suggest repairing permissions about once a week for a couple of weeks, and if there are never more than a few lines about "man" files and other mundane things, you can probably forego repairing all together unless things start to get weird.