It provides barometeric pressure info to the computer. That way the computer knows if you are in a valley (dense air) or on a mountain (thinnner air), at Miami Beach or in Denver, Colorado. If it is not present, the computer will fake it and your performance & mileage will suffer greatly.
Here's a book that will get you started with how the Ford electronic engine control or "computer" works.
Ford Fuel Injection & Electronic Engine Control 1988-1993 by Charles Probst :ISBN 0-8376-0301-3.
It's about $20 from Borders.com see http://www.amazon.com/ . Select boo...very good, and I found it to be very helpful.