Snow Leopard is mostly about optimizing Leopard's performance rather than introducing new features. Part of that optimization is that OS X 10.6 is expected to save users several gigabytes of space on their hard drives versus a 10.5 installation. And part of the reason that Snow Leopard is able to pare down that much space is that Rosetta is now an optional installation.
(Update: as many commenters have noted, the Rosetta program itself doesn't take up much space - only a couple of megabytes. Most of the space savings in Snow Leopard is from Apple stripping out PowerPC binaries from the apps and OS libraries. It's still worth going through your apps and updating the PowerPC-only apps to universal binaries, however, because you will still see a significant boost in performance by doing so.)
Introduced in 2005, not long after Apple announced its transition to Intel processors, Rosetta is a dynamic translator that allows legacy PowerPC applications to run on Intel processors. It was intended as a stopgap measure to allow PowerPC applications to continue to run on Intel-powered Macs until developers were able to update their applications to support either universal binaries or Intel-only code.
Applications which run under Rosetta provide slower performance than their universal binary counterparts because the CPU has to translate Intel instructions into PowerPC, so developers definitely had an incentive to switch to universal binaries. With four years having passed since the Intel transition, almost all applications for the Mac now run under a universal binary, which makes Rosetta largely unnecessary-hence its inclusion in OS X Snow Leopard as an optional installation.
So, why not save some space on your hard drive and leave Rosetta out? Well, if you do that, any applications you have that still have PowerPC only code won't run at all. (Update: Apparently Rosetta will download on demand if you try to run a PowerPC-only application.) Rosetta is absolutely necessary to run those applications. But, before Snow Leopard drops to consumers, you can take one simple step that will save you a lot of trouble.
Go into your Applications folder, select the first application that comes up, and hit Command-Option-I. Rather than the single-app Info window you get with Command-I, this will bring up an inspector window which will stay up until you close it, and it will dynamically change as you select other applications. The information you're looking for is near the top: under "General," the data for "Kind" will read one of three things: Application (PowerPC), Application (Universal), or Application (Intel).
(PowerPC) = Uh oh.
If the application kind says Application (PowerPC), you're going to need to update that application if you want to continue to run it in Snow Leopard without installing Rosetta.
(Update: you can also go into System Profiler and locate a list of all applications on your Mac. This list will also show which kind of binary the app runs under: PowerPC, Intel, or Universal. Note that if you have a program like Photoshop CS installed, it will count "droplets" as individual applications, so this list will be much longer and potentially more confusing.)
You can either use that application's built-in software updater to check for updates, or you can do what I did: go to either versiontracker.com or macupdate.com and search for the applications there. Both sites will tell you when the application was last updated, as well as what platform the application will run under. If it says "Universal" or "PPC/Intel" then you're good to go-update the application, and it will run just fine under Snow Leopard without Rosetta.
This works just fine for most freeware and shareware applications, but what if you're running an earlier version of a major developer's application that's still PowerPC-only, like Microsoft Office 2004 or any version of Photoshop before CS3?
Well, in that case, you don't have many options. You'll either have to pay to upgrade to a newer version of the application that's been updated with a universal binary, like Office 2008 or Photoshop CS4, or continue to use the older application with Rosetta installed. If you shelled out the cash for those earlier versions and can't afford the new ones, it doesn't make sense to burn your software bridges just to save a couple gigamegabytes of space on your hard drive.
For smaller niche applications you may have that were free but haven't updated in years and are still PowerPC-only, like one of my favorites, iTunes Statistician, it might be time to ask yourself: is this application worth keeping if it means sacrificing space on my hard drive to run it? If the answer is no, then you know what to do: the trash can beckons.