Well, I can tell you I can't hear any difference between my M-50's amped or unamped via Fiio E17, out of my iPhone 4 LOD. In this configuration, you use the iPhone's internal DAC and amplify the signal with Fiio's E17 amplifier.
Out of my PC, there is difference when I output from it via USB to the Fiio DAC, but this difference is very probably because of the DAC and not the Amp (integrated sound card is Realtek). It helped smooth out the treble IMO.
But I would not drop to much money on an amp for the M50's... from experience I think a clean source provides better results than amping this cans.
As for your question "what is the purpose of an Amp?". To begin with, all modern digital DAPs / receivers / stereos / etc. have an integrated amplifier for the headphone out, but it may not be powerful enough to drive "hard driven cans" (like the AKG Q701 and its siblings) or may not have the sound signature you preffer, or its output impedance may not be a good match for your 'phones. So you feed your cans via an external amplifier.
Much related is the DAC, I suggest you google a bit, as this is an extensive subject.
Edited by Elektrospeed - 11/10/12 at 8:46pm