Glenn Graham has a good overview of NTP at O’Reillynet:
If your server doesn’t keep accurate time, your log files are useless in the event of an incident that requires log-dependent information, including security breaches. E-mail servers and other clients depend on accurate time to relay, send, and receive data. What good is the date stamp contained in an e-mail if the server that passed that information is inaccurate? These programs all must be timed precisely to within 1/100 of a second.