Online check-in (OLCI) has advantages for both you and the airline. In the past of course, you had to haul yourself to the airport, wait in those dreaded lines, and introduce yourself as a passenger ready to fly. You were then asked those generic security questions, "did you pack your own bags?" and "have you been in possession of your bags since you packed them?" Only then were then granted boarding passes to fly.
Today, the airlines are pushing folks to check-in online, or at the very least, to utilize airport self-service kiosks. The obvious advantage to the airline is fewer staff needed to assist customers.
There is yet another, more subtle benefit to the airlines when you opt to check-in online. By doing so, you are reconfirming with the airline you intent to fly. This provides the airline with valuable data, that when combined with everyone else on a particular flight, allows the airline to calculate how many passengers may not show up for a flight, thereby allowing them to sell a few more of those high-priced last-minute tickets. It's far from an exact science, but as a higher percentage of folks opt to go online to print boarding passes, the advantage to the airline increases.
For the passenger, OLCI has streamlined the process, allowing folks to print boarding passes at home or work up to 24 hours in advance of a flight. By checking-in online, you are telling the airline you are ready-set-go for your flight. They are expecting you, and with open arms, looking forward to your arrival. Should you not board the plane in time, the gate agent will probably have you paged throughout the airport. If you are still a no-show, then the airline may deny you boarding. In other words, unless you are running really late (everyone else has boarded), you will probably be fine, thanks to OLCI.
Similarly, if you are running late, but not excessively late, and without checked-luggage, you can proceed directly to the security line once arriving at the airport. Nobody at the airline really knows you're late (I won't tell). If luck is on your side, and the security line is running quick and efficiently, you can still catch your flight. In contrast, airport kiosks have a cutoff time, often 30-45 minutes before departure, regardless of how many people are in the security line. If you arrive very late, and have not checked in on-line, you will have a tough time convincing airport staff to issue you a boarding pass.
OLCI is particularly helpful when you are traveling. Online check-in does not mean you need to print boarding pass actually; you are simply confirming your travel plans. So if you are away from a printer, you can check-in for your flight, and then later print boarding passes at the airport. The key is to check-in for flights in advance.
Another added benefit of OLCI for passengers is the option for advance notice of irregular operations or special circumstances. If you flight has been delayed or even cancelled, online check-in should inform you of this information. Perhaps the airline is selling some last minute upgrades, online check-in allows you to purchase these before they are offered to other passengers.
Finally, the seats. Doesn't it always come down to the seats? With many carriers, checking in online gives you a last chance opportunity to appraise the seating arrangements, and whether you want to stay put, or move elsewhere on the plane. Online check-in allows you to visually see what seats are available, should you decide to change your seat.
Overall, OLCI benefits everyone. It provides the airline with useful information on potential flight loads, and gives greater flexibility to the traveler.