Software mixing of multiple audio streams, bypassing any restrictions the hardware has.
Sample rate conversion of audio streams
Network transparency, allowing an application to play back or record audio on a different machine than the one it is running on.
Sound API abstraction, alleviating the need for multiple back-ends in applications to handle the wide diversity of sound systems out there.
Generic hardware abstraction, giving the possibility of doing things like individual volumes per application.
PulseAudio comes with many plugin modules.