To be honest, I didn’t have a good understanding myself, but the Wikipedia’s article is actually very entertaining.

Machine washing puts great mechanical stress on textiles, particularly natural fibers such as cotton and wool. The fibers at the fabric surface are squashed and frayed, and this condition hardens while drying the laundry in air, giving the laundry a harsh feel. Adding a liquid fabric softener to the final rinse (rinse-cycle softener) results in laundry that feels softer.

Wow! But wait a second:

In the US and UK laundry is mostly dried in mechanical dryers, and the tumbling of the laundry in the dryer has its own softening effect. Therefore, fabric softeners in the US and UK are used rather to impart antistatic properties and a pleasant smell to the laundry.

Seems like a lot of plastic and glop used there to achieve an effect you could get much more pleasantly by smoking a joint in the laundry room.