it gets your pickups signal high enough to allow the amp doing its work. a lonely amp couldn't hear your guitar signal, hence the preamp. any amp (head, combo, rack-built) has a built-in preamp. it's a middle step between your guitar and your amp.
also, the preamp is pretty much the stage were your signal gets characterized. your preamp does make your guitar playing good or bad, not your amp.
in Italy we say it makes the 'pasta' of your sound.
you can choose to have a rack-built preamp, or just a pedal, or use your combo's preamp stage and then go thru another amp. there are millions ways to preamp your guitar, but it's not an optional: you MUST preamp.
that's what i know about preamp, sorry if i'm not too into tech, but i think you needed just an enlightment.