The BASE tag is used to indicate the correct location of the document. Normally, the browser already knows what this location is, but in certain cases, like when working with a mirrored site, the URL used to retrieve the document is not the same as what would be used with a relative URL. This when you use the BASE tag. You must use an absolute URL with the BASE command.
If you had a document with this in it:
In the example <BASE HREF="http://www.MyPage.com/"> tells the browser that all relative URL's should point to http://www.MyPage.com/ and then add the relative URL after the foward slash.
You do not need to include this tag in every document, only use it if a relative URL won't work without it, and only use once per document.