When babies are first born, they are dependent on us for all movement. They are suddenly in a world that has gravity and their muscles have to adapt. So, any position you put them in their muscles are going to have to work. If they are on their back, they are working their muscles on the front. If they are on their belly (yes the dreaded Tummy Time), they are working their muscles on the back. So how do they work the muscles on the side? Its easy, by lying on their side. It also serves an added benefit of getting them off of their back (decreases risk of getting a flat spot on the back of their head). These side muscles will help them with things like holding their head up, being able to sit, rolling, and many more.
By incorporating side-lying into your babies routine you are adding another position to their repertoire. They also get a chance to bring their hands together for play (gravity helps with this). They get a completely different perspective from which to discover the world, and you can get down face to face with them to interact. You can put rattles, or books, or toys that they are engaged with right there at their hands and they can begin to explore, without having to lift their whole arm up against gravity.
A lot of babies will being rolling from this position. Usually its accidental at first. They start to get stronger (although still lack control) and may fling their arm around, or move their head, and next thing you know they are on their belly or their back. Eventually, because babies are pretty smart, they start to refine and control their newly developing strength and realize that they can make themselves move into a new position. The added benefit of side lying to help rolling is that it cuts it in half (and has the help of gravity). They can start to develop independent movement without having to figure out how to move their body in a complete 180 degrees, they can cheat by starting with 90 degrees.
How have you used side-lying with your baby?