Installation profiles allow you to easily install Drupal with additional functionality included by default. For example, you can set up an installation profile to:
Automatically add additional users to your site
Add additional roles to your site
Set up permissions for default users
Add additional contributed modules to your site
Add additional themes to your site
Add default content to your site
Modify common settings to speed setup
As you can see, the options for installation profiles are nearly limitless in Drupal 7. This is especially true because installation profiles are essentially modules now, and you can do nearly anything you want to with a custom module in an installation profile.
If you are only maintaining a single site, you probably won't want to create an installation profile, but if you are setting up many new customer sites each month, you should definitely consider building a custom installation profile to set up a base site that you can then...