"DS Store" stands for "Desktop Store." The .DS_Store file is created and used only by OS X. It serves many of the same functions as the Desktop file did in OS 9--it stores window views, icon positions, and so on.
It is not essential. If you delete this file, you won't harm your system. All that will happen is the next time you open that folder, the folder view will be set to the default view, and the icons will be set to default positions. When you change folder views or move any icons, the .DS_Store file will re-appear.
Normally, each folder accessed or used by OS X will contain one .DS_Store file. If you copy or move a folder, its .DS_Store file will go with it; that means if you FTP a folder or stuff a folder, its .DS_Store file will be FTPd or stuffed along with the rest of the folder.
I seem to recall seeing a program on VersionTracker designed to purge .DS_Store files, but I can't remember now what it was called.