A networked computer (even if just over a modem) can check its own clock automatically by comparing it to the time on another computer known to keep accurate time. Network Time Protocol (or NTP) does exactly that. It is a method of verifying and correcting your computer's time by synchronizing it with a another system. With NTP your system's time can be maintained to within milliseconds of Coordinated Universal Time. Visit http://www.time.gov/about.html for more info.
For more casual Linux users, this is just a nice luxury. At my home all our clocks are set based upon what my Linux system says the time is. For larger organizations this "luxury" can become essential. Being able to search log files for events based upon time can make life a lot easier and take a lot of the "guess work" out of debugging.
Another example of how important NTP can be is with a SAN. Some SAN's require NTP be configured and running properly to allow for proper synchronization over filesystem usage, and proper timestamp control. Some SANs (and some applications) can become confused when dealing with files that have timestamps that are in the future.
Most Linux distributions come with a NTP package of some kind, either a .deb or .rpm package. You can use that to install NTP, or you can download the source files from http://www.ntp.org/downloads.html and compile it yourself. Either way, the basic configuration is the same.
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