Instead of cribbing the whole text of the Ms-PL and dropping it here, I'll just refer you to the source:
Open Source at Microsoft: Licenses: Microsoft Public License (Ms-PL)
That hopefully answers the "what" question.
The "why" question is a little more interesting... You need one because:
Oh, and since it's pretty short, you should probably read it... especially 3(D) which says (paraphrased): "Don't forget to include a copy of the license in your distribution somewhere."