[chrisin2d]

It's known as phatic communication. It's not nonsense or noise: it conveys a wealth of information.

It (re-)establishes the relationship between two parties (and to observing parties). You can tell if two people are strangers, friends, or enemies by how they do this ritual.

It signals intention on part of the initiator and receptiveness on part of the responder. If "Hey, how are you?" gets a cold and abrupt "I'm fine." without a reciprocating question, then it's a pretty strong signal that the other party isn't open to further or prolonged conversation.

It's also like a shibboleth. How someone interacts in the ritual can signal how well socialized s/he is and whether s/he's an in-group or out-group member. If you ask someone you don't know very well "How are you?" and s/he immediately begin telling you about the rash on his/her belly and how s/he hate the traffic and the weather, then that might tip you off that s/he doesn't understand your society's social protocols and therefore is either a social misfit or an outsider.