From what I've heard, filtering water is not as important for extract because someone else has basically done the mash for you (and hopefully with corrected water). Water treatment benefits the mash more than the boil.
The lactic acid is used to lower the pH of the mash. Again, I am completely new to this, but the internet (this forum) has told me that optimal mash water pH should be below 5.6 (5.2-5.3 is best I guess). Since I was using test strips (not a meter) I just tried to get it below 6. I used the EZwatercalculator 2.0 to figure out how much lactic acid I needed to add to achieve this for my recipe. Google how pH affects the mash (way too much for me to write, plus I'll screw something up). I plan on figuring it all out, but for right now, I just now that lowering pH into the right levels is important for making good beer. I do know that elevated pH will extract more tannins.
Hope that helps.
edit: you can also lower pH a number of other ways, such as adding acidulated malt to the grain bill, and some brewing minerals lower pH too.... if you download ezwatercalculator 2.0 you can play with the numbers and see it for yourself. Please refer to the "Brew Science" sub-topic here... I learned a ton there.