Dice towers are have a hole at the top, where you throw in the dice, and a hole at the bottom, where the dice come out. They're really useful because they
Contain all the dice that are rolled in one nice, tidy spot (if you're throwing six dice at a time, as you do in games like "Axis and Allies" or "Heroscape")
Give you a flat surface that makes it clear whether your d20 roll is showing "5" or "17" (a problem especially when you're playing on a carpeted surface)
Make rolls really random (no temptation to cheat)
Avoid the question of whether you should re-roll any dice that fall off the table, etc.
They're just cool!
Dice towers can be made out of just about any material, including wood, cardboard, styrofoam, and even legos!
Check out some pictures of various dice tower designs at the Boardgamegeek website!
Here is a picture of the dice tower I made:
