The sidecars are useful for two things:
1. Metadata exchange. The sidecars are XML, and allow you to "port" metadata associated with a file from one machine to another, or to other applications (by parsing the XML), for file types that don't contain embedded tags (or where the tagging isn't very robust or standardized, like MKV and MP4).
2. Backup. Just like embedded tags for your music files, this allows you to rebuild that valuable data should your Library (the MC database) get completely hosed. This is unlikely because MC does automatic backups, but if you have a catastrophic hard disk failure (and you didn't move the default backup location off of your C drive), you could be in trouble. This is a valuable fallback position, just like embedded tags in other media types.
If they annoy you, you can disable their generation here:
Options > General > Importing & Tagging > Store tags in external sidecar files
One thing I use them for, is to allow MC to be a front-end (metadata manager) for the streaming video Library on our corporate Intranet. So, I have a number of Lecture capture systems that record seminars and events around campus. These save to a location on the SAN, which is then monitored by a copy of MC via Auto-Import. The Tag On Import rules allow the system to automatically parse metadata from the filenames and whatnot, and then the sidecar XML files are generated.
Our webserver has some JavaScript that reads the XML and autogenerates a "corporate YouTube" based on the [Genre], [Series], [Season], [Keywords], etc tags in the XML files, and allows me to simply tag the files in MC when I need to change the Title of a seminar or add a category or whatever.
At some point, I'd like to fix these scripts to access the MC database directly via MCWS instead, but that's going to require learning some ASP.Net stuff, or hiring a better JavaScript programmer.
By the way... If anyone here is good with JavaScript, and expert-level with MC, and looking for a little side-gig, PM me. The webserver is just IIS (it is internal only so who cares), though if we "fix" it, it would be nice to be able to handle our external site too.