There are simply too many gratuitously different file formats to hold waypoint, track, and route information in various programs used by computers and GPS receivers. GPX defines a standard in XML to contain all the data, but there are too many programs that don't understand it yet and too much data in alternate formats.
Perhaps you have an Explorist 600 and your friend has a StreetPilot 2720 . You've collected a list of your favorite locations as waypoints and you'd like to be able to share them. Unfortunately, his copy of Garmin Mapsource won't read data created by your copy of National Geographic Topo . What you need is a program that converts data between the two programs.
GPSBabel actually solves that problem for you and much more...