The most common reason for a machine being placed in the DMZ is to allow it to run internet services such as a web server or multiplayer game server without impeeding on the rest of the network's security.
The machine may be defined as in the DMZ by a router, or firewall, or may be physically connected in such a way that it is not affected by the activities of a firewall or other security device.
The term DMZ is derrived from the political/miliary term DMZ, meaning Demilitarized Zone (See another definition).
2) Nuu~ yew hax0r, u'll hax my b0xorz!
1) WTF did you just say? o_O;