The "why" about VLAN is typically that you have a finite block of IP addresses with which to work. VLANs allow the engineer/admin to be very creative in terms of subnetting. Another aspect is when it is important to subnet users within a LAN based on roles or departments but not hinder their ability to work at different physical locations. Hope that gets you on the right track about VLANs.
edit: Oh, one other excellent reason for VLANs... they are configured on switches and somewhat negate the reason to purchase a router while providing much of the functionality.
Edited by pchartwell, 10 June 2005 - 12:27 PM.