Mastering is the process of placing the songs of your project in the correct order and matching the relative volume and tone of each song. Mastering also includes adjusting the space between each track on your CD, as well as increasing the clarity and definition of the instruments in your music.
Audio mastering will help eliminate sibilance (too much ssssss) and plosives. (Loud puffs of air in the microphone.)
The mastering process often includes adjusting your intros, endings and fadeouts, and typically raises the average volume of the entire project.
You need mastering if you want your music to sound as defined and full as the major label guys.