A top stitch is a finishing stitch, usually sewn on the edge of pieces that have been sewn together.  It's commonly found on collars or on areas where there will be a facing. In this particular case, I'm using it on the open edge of my jacket. While it's functional and can be done with a straight stitch, you can also use contrasting thread and decorative stitch to make something that stands out. It's important because it gives your projects a not only a professional and finished look but also helps in making sure your pieces are crisp along the fold.