In theory Mac file extensions are completely unnecessary. In reality a number of applications prefer them and in some cases require it. The way it is supposed to work is every file and application has a type and creator code. The explanation below applies to the classic Mac OS as I am not sure how Mac OS X associates files with applications.

Suppose you have a JPEG image. The type code of this file would be "JPEG" and the creator code would determine what application will open this JPEG. A creator code of "ogle" would open with PictureViewer (QuickTime) while a code of "MSIE" would open with IE. Applications have type codes of "APPL" and the creator code is the same the code assigned to the files that open in that particular application ("ogle","MSIE",...).

The rationale behind type and creator codes, which are normally hidden from the user, is files can be named anything and they will always open in the proper application.