Re-grooving clubs is a very inexpensive and often overlooked area of performance in your golf clubs.
Your car tires have tread on them, so moisture and debris have a place to go, and your tire has a larger contact patch with the road. Without the tread your car would slide out of control during wet and slick conditions due to lack of surface contact.
Grooves on the clubface work the same way, giving dirt, grass, moisture, and sand a place to go so the clubface can make clean contact with the surface of the ball.
Clubs should be re-grooved about once or twice per year depending on how often you play. There are some rules the need to be paid close attention to when re-grooving is done so the club is legal for play.