[glogla]

I'm not sure how it works now, but older Kindles were just mass storage devices so you could put books there by hand.

[josteink]

You still can, but calibre lets you do format-conversion (since mobi is the only real format you can push to it while retaining readbility).

It also allows you to tidy up meta-data and stuff to make things look better.

It's definitely a "required" component as far as my Kindle is concerned.