Welcome to the forums!
Rooting a phone is the same thing as getting Admin access on a PC.
From there, you get more options and control of your phone, for example, installing DroidWall, the Android firewall, or getting more backup options.
In addition, yes, you can replace the system altogether, but that's not the only point of rooting. And as anoniemouse says, not really desirable here.
Moving this to our root forum for you.