Whisks have several purposes: to blend ingredients to a smooth consistency, to incorporate air into a mixture and to emulsify, or combine ingredients that don't normally hold together. As a whisk moves in and through a liquid, each of its wires creates a stream of air behind it. This action helps incorporate air into the mixture, and causes foods like whipped cream to be fluffy and meringue to be light and airy. Whisks are also good at bringing together substances that don't normally mix well, like oil and water, or oil and vinegar. For example, a whisk can be used to make mayonnaise or salad dressing, both of which contain oil and vinegar.
There are several different kinds of whisks, but the kind you'll use most often and for the widest variety of tasks is the balloon whisk. It looks kind of like a light bulb made out of wires. Other kinds include a flat whisk, a ball whisk and a gravy whisk.