It would be GREAT if we actually could buy stuff with points, but in reality that would just make people game the system for points even more than they already do. The points are mostly just an incentive for people to start answering questions, and also to vote on other answers, and finally, to rate other people's answers.
Other than that, the points don't do anything. You do get some extra 'attention' at higher levels, but that may or may not be a good thing. There are no secret special prizes, at least none that any of us at Level 7 have heard of.
Mostly, just enjoy the site, ask and answer questions. If you like, keep track of your points as you move up in levels. After awhile, you'll be more interested in responding to people's questions with quality answers.
Here's the link where you can see what the different levels are and how to earn points.
http://answers.yahoo.com/info/scoring_system
Welcome to the site!