Linux can be used for many different task. It can be a server (file server, application server, database server, Internet gateway) or a workstation running desktop packages (word processor). It can even be an X terminal (Graphic terminal displaying windows of programs running on an application server).
Askrunlevel allows you to pick the operation mode right at boot time. Generally you will have a default operation mode and a timeout allowing your computer to boot and start normal operation without user intervention. This is especially useful for servers.