Routers can be used for decorative finishing, template tracing, sign etching, joinery, the list keeps gong.

I do not consider this one of the shop essentials, all of the non-decorative features can be done with other tools.

With that aside, a router is a very versatile and useful tool.

What kind of router do you need?
For freehand work I recommend router with multiple bases. In the picture above the router is attached to the plunge base. the plunge base will let you change the depth you are cutting on the fly. The base on the right is the fixed base. This is good for template cutting and joinery.

If you plan on making molding, or want to work with small pieces of wood I recommend investing in a router table. Depending on how much work you plan on doing you can get a table that will accept your fixed base router.