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SSL will encrypt the data that a user enters in a form before it gets sent to the server. This way if it is intercepted by a third party, it will be unusable. It also gives your customers a warm fuzzy feeling when they see the lock icon in their browser.
If you will be asking users for personal information (name, address, etc) then it must be gathered over a secure connection, ie SSL. If all you will be using is Paypal, then they will take care of the security in regards to payment information.
A lot of hosts will allow you to use a free shared SSL certificate if your not asking for banking information.
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