The services menu is an old NeXTstep feature that was half-heartedly carried over to MacOS X. (One aspect that was not carried forward: the services menu in NeXTstep appeared in the contextual menu that would pop up when right-clicking on something...no digging around through nested submenus.) In Snow Leopard, they revamped things so that only the relevant services show in a given context, and I think they gave the ability to assign keybindings to them, and put the back in the contextual menu where they belong.
