Every piece of ongoing research needs to be connected with the work already done, to attain an overall relevance and purpose. The review of literature thus becomes a link between the research proposed and the studies already done. It tells the reader about aspects that have been already established or concluded by other authors, and also gives a chance to the reader to appreciate the evidence that has already been collected by previous research, and thus projects the current research work in the proper perspective.
A large part of review of literature actually needs to be done even before the research project is formalised. This is essential to make sure that you are not repeating the work that someone has already done earlier. Sometimes, if the research proposed by you has already been undertaken earlier, then it provides you an option of modifying your work by adding a new perspective or altering some of the methods of research to obtain a perspective that will be different from earlier works and thus more valuable. Occasionally, your work may be exact repetition of the work done earlier, but with a different set of data or sources of facts, and purpose of the research may just be see if your results are similar to earlier works or otherwise.
A good researcher usually goes through a lot more literature than is actually incorporated in the paper. This is because different literature may have differing relevance for the current project and all of it may not worth reporting in the end, but in the initial phase, when you are looking for all aspects of an issue that could be relevant one would like to extensively explore the literature and see if any relevant findings are already available. Some of the literature reviewed is directly relevant and hence used as a preface to explain the background of work. Then other reports may be relevant from the point of view of the project as they provide some clues to the puzzle by suggesting a hypothesis, which may be the subject matter of your research project.
Lastly, review of literature is also important to highlight difference in opinions, contradictory findings or evidence, and the different explanations given for their conclusions and differences by different authors. In some cases, an analysis of these factors can help one understand may facets of a complex issue and at other times, such analysis can lead to a new possibility that can be researched upon in the current project. Thus review of literature is a very important part of one's research.
To summarise, there is hardly any research project which is totally unrelated with research that has already taken place. Usually every individual research project only adds to the plethora of evidence on a particular issue. Unless the existing work, conclusions and controversies are properly brought about, most research work work would not appear relevant, not will it appear important in the whole framework. Thus, review of literature is a very important aspect of any research both for planning your work as well as to show its relevance and significance.