The main benefit to using a starter for the brewer is reduced lag time. Lag time sucks ass, and reducing it is sweet. With a good starter pitched into well aerated wort you can cut the lag time down to <1 hour. Without one, you could be waiting anywhere from 8-48 hours.
There are several ways in which the beer will benefit. Reducing lag time benefits by keeping other nasty microbes from getting a foothold, and out multiplying the yeast and ruining (or at least tainting) the beer. Pitching a good amount also reduces the chances of many off flavors produced by underpitching. Good pitching rates also ensure the beer will fully ferment out, and not leave alot of risidual sweetness behind. (this is especially true of high gravity beers). There are some english strains also that like to flocculate or settle out rather quickly, which will leave a beer un-finished, unless adequately pitched.
There are other benefits, but i hope you get the point: Starters are good. No they are not neccessary, im sure many people make awesome, award winning beer without them, and the liquid yeast they sell now (white labs pitchables, and wyeast smack packs) are equvilent to a 1-2 pint starter anyway, but you can, and your beer can, always benefit from a starter.
when i make a starter i use white labs pitchables and 2 days prior to brewing i boil 2-3 qt h20 + 2/3-1 c. dme for ten minutes, cool to >75 aerate, pitch into 1 gallon glass jug with airlock, let sit for 48 hrs. (its just like a mini-beer, except i dont use hops, some do, some dont...)