When you invoice your customer for this work, the service item appears on the invoice. It represents the type of work performed, and tells QuickBooks which account to use to track the income you receive from the work. This, in turn, gives you the ability to analyze which types of work are the most profitable for your business (on sales by item reports), and how much company time goes into each type of work (on time by item reports).
If you do not intend to bill your customer for this work, you still may want to enter a service item. For example, if you spent the time correcting an error on a job, filling in the Service Item field gives you a record of your non-billable time for the that type of work.