In adding on to "knife saber's" response, the "hamon" definately does have a function, and to describe it very simplistic, so it may be easy to comprehend, would be that the hamon is like a line through the middle of the blade, separating the edge which is the harder side, and the spine being the softer side. This is important so that when an object is struck, the harder tempered edge will contact the object and make the cut, whilst the softer spine will flex and absorb the impact. Without tempering the blade in this way, as knife saber mentioned, it would be too brittle, and simply snap on impact, whereas by differentially tempering a blade using clay to produce a hamon, it is possible to make the rear half of the blade softer than the edge, so that the entire blade won't be as brittle, and therefore won't snap, and will last longer, cut more efficiently, and effectively.
So whilst the "hamon" is visually pleasing to the eye, it is definately a functional element, and crucial for that matter, in that every quality, functional katana should be differentially tempered, therefore having a hamon.
In Ancient Japan, the pattern of the hamon could often be used to identify the swordsmith whom created that particular katana, in terms of the number of "ripples", the flow/pattern and so forth. Nowadays, the quality katana's are traiditionally tempered to produce a hamon, however the lower quality katana's are simply acid-etched to bring out a hamon, however if you compare the two, the inferior quality hamon will in no way be as stunning as the traditionally clay-tempered hamon.