Probably the single biggest purpose is a migration path from ISP-hosted mail to Exchange mail. Companies with existing Internet service provider POP mailboxes may have published these e-mail addresses in business documents and will wish to maintain these. The POP3 connector will ease the migration to SMTP-based e-mail by providing continued support for the old ISP mailbox.

Another purpose is that it eliminates a possible conflict between Outlook profiles. Often, when people are setting up their Exchange servers to host SMTP mail, their Outlook clients already have an Internet mail-only profile set up, meaning that they are connecting directly to the ISP and downloading the e-mail.
When they then configure e-mail with SBS 2000 Server, they will often configure Exchange Server services in the same profile with the Internet mail-only profile. The Knowledge Base article listed here, Q245446, goes on to explain the issues related to this, and why it's unsupported.

Another purpose for the POP3 connector is for dynamic IP addresses and transitioning from one ISP to another. It could be an SMTP server is impractical when companies have dynamic IP addresses (which is commonplace with many of the most popular Internet connection types, such as cable modem, ISDN lines, and, in some instances, DSL routers). With the POP3 connector, end users only need to be able to configure Outlook to connect to their Exchange Server mailbox to access both their internal mail and their external mail, which will, again, come through the POP3 connector to the Exchange Server.

Another purpose of the POP3 connector is to provide for backing up e-mail in a central location. If users are going through Internet mail-only, then they're probably saving all mail on their individual workstations. By configuring the POP3 connector, it centralises this by downloading the mail to the Exchange mailbox on the Exchange Server and giving a single point of backup.

It was created specifically for the Small Business Server installation. So, it is not available on a full version of Exchange, either 5.5 or 2000. It can support more than 15 individual mail accounts, which was an issue with the version 5.5.

The POP3 connector can handle more than one ISP, more than one mailbox. It will actually go out and check for both mailboxes. You simply configure the different ISPs, because the connection, again, is not a dial-up, per se.
The POP3 connector is going to just issue a signal and go to whomever you've configured it to go to. So you can configure it with multiple global mailboxes, or you could have multiple user mailboxes and simply create one for the different ISPs that you were trying to connect to; it will send the signal and then go make that connection.

Bcc will not work with the POP3 connector. It occurs due to a limitation in POP3.
When an SMTP message is delivered to a mail host, the mail host is responsible for the routing of the message to the intended recipient. During the normal operation, the mail host will construct a message without the Bcc box in the e-mail message. So the message is then delivered to, let's say, a global POP3 account.
When the POP3 connector downloads the message, the recipients are not visible in the message, just as they would not be visible to a standard POP3 client that downloads the same message. So the POP3 connector will deliver the message to the SMTP unchanged. Then, based on that, it's unable to forward the message to the intended recipient because, again, the header of the message does not contain the original reference to the Bcc recipient.