First, it reduces the sun's influence on the meter so your pictures won't be so underexposed. Second, it makes the sun more of a point source of light, and in conjunction with a small lens aperture (like f/16 or f/22), you get a star effect. And third, the brilliant light isn't so hurtful to your eyes.
More information...Jim Zuckerman teaches for BetterPhoto's online photography school, including these courses: Techniques of Natural Light Photography and Developing Your Creative Artistic Vision. Also, he contributed to Jim Miotke and Kerry Drager's how-to books: The BetterPhoto Guide to Photographing Light. and The BetterPhoto Guide to Creative Digital Photography.
Article by Jim Zuckerman. To learn more about photography, explore the many online photography and Photoshop classes offered here at BetterPhoto.com.