Actually, it's the Low Tire Pressure warning light. In my car, there is a sensor embedded in the ABS braking system that monitors how the tires vibrate as I'm driving around. The sensor is calibrated at the recommended tire pressure. If the pressure in the tires is much lower than the recommendation, it will give a "mushier" ride with different vibration characteristics. When those characteristics are different enough from the calibration, the warning light comes on.
While it's comfortable not to have to feel every pebble on the road, it's not a good idea to drive with under-inflated tires. The contact area with the road surface is larger, so the friction is larger. This does no favours to your fuel efficiency.
Especially if your car is outfitted with those plus-sized tires that are so ubiquitous now, you really need to keep an eye on tire pressure. Tires that are shaped like onion rings, with their reduced side walls, are much more prone to under-inflation trouble than regular tires shaped like donuts: it's much easier to end up driving on the rims, say, when you hit a pothole.
Low tire pressure icon by Hydrargyrum via Wikimedia Commons.