We get this question alot. The answer is twofold:
1) To produce the color white on a dark garment, this is the obvious one!
2) To fill in the halftones on lighter images so that there is enough toner on the page to fully transfer to your garment or to pull all the B adhesive
This second point is the most important one and the reason why you can't simply use a CMYK printer for transfer printing. Also, this is why you MUST use the color white all the time (assuming your image has some halftones in it). Even when printing on a white garment and there is no white at all in your artwork! This is the biggest misconception with new users. Don't make that mistake, always use the white!
Now you might ask...why include black toner on an iColor if you can't use it? Good question...the answer is that the black toner is mainly used to print on papers or other non-heat transfer items. Or, it's used when your transferring a completely black image to your garment (it's cheaper to use black toner). Or... maybe you are using Presto! paper where it's suggested to use pure black. Of course if the image you are transferring has NO halftones you could use CMYK instead of CMYW but you are not saving much here because the RIP will reduce the white toner usage to nearly nothing if it's not needed anyway!