The beta test is akin to the Public Test Realm on World of Warcraft and is essentially a place where Valve can mess around with the game to see what works without breaking the experience for players.
Possible uses for the beta test are "testing and tuning various class, item, and weapon changes... map changes and variants... [and] new technologies without the risk of breaking the game."
More details can be found on the Team Fortress 2 blog as well as an FAQ and if you want to get involved buy a copy of the game on Steam and download the beta as well.