(As written in the N in-game help:)
"Make sure you've got a landing planned or it may end up being a one-way trip."
When you come into contact with a launchpad, it launches in a set direction (depending on which way the launchpad is facing). This can be used to reach otherwise inaccessible areas, speed you up, or kill you when you smash into objects too quickly from the launchpad's added burst of speed.
Another useful feature of launchpads is that you may bolt into one at any speed and you will not be killed, as you would by smashing hard into other terrain objects. Many levels take advantage of this, by forcing you to aim at hard-to-reach launchpads when falling. Also, some levels may use launchpads as a guide of some sort to help you get to where you're going, like in 45-1: Inca.
- 45-1: Inca
Another well known use for the lauch pads is using it to teleport in some cases.