This module allows you to display the log in module on a page, rather than use the 'login' skinobject which, when clicked, takes you a separate page to log in.
There are different arguments to utilising the module, rather than the skin object and each has some validity in the thought process.
For marketing purposes, screen realestate is a premium. The person who markets their site wants to utilise the space as much as possible, and the log in module may take up more visual room that really is needed. If the site does not require logging in by web visitors, and only administrators, then it seems a waste of time. However, a design can be complemented with the use of the login module, but with dnn, once logged in, the module does not display the same as when logged out.
The best use of this module is to have it set to be for 'unauthenticated' users, and when registered users visit are logged in, they do not see the module at all.