Two make a current in the tank ..
also they can be used to pump water to let's say a wet/dry sump setup..
add oxygen to the water by increseing circulation .. in the pic you can see a powerhead in the middle of the two air stone's .this is a visual explaination for what a powerhead is for..
to grind up small fish >.<... it move water around so the fish feels more comfortable.. and some fishes like to swim in the current... like stated above
pretty much whats been said already, keeps the water moving so that fish poo and stuff get moved to the filter and they can be used to oxygenate.and power small filters
don't forget they can be used as wavemakers to create topwater movement in addition to creating current and they can also be used to power undergravel filters
I like to use a power head on top of a sponge filter.
If You look at my sig, in the pictures. On the right hand side is a sponge filter and power head.