They are used to absolutely reference something, regardless of where the formula is dragged to.
For Example, if in cell a1 you typed the formula 'B1+C1', when you drag that formula down through column a, it will become B2+C2, B3+C3, B4+C4 etc.
If, however, you use the formula =B$1 + C$1 then if you drag that down, all of the cells will have that formula, and perform the same calculation.
It can be very useful when developing large formulae that you then carry across otehr areas on a spreadsheet.
HTH