A VIN isn't just a way to mark and identify cars. You can use the VIN in a number of ways. Most people use a VIN when they are thinking of purchasing a used car. For a fee, commercial services allow you to enter a VIN and see the records on that car in the MVR database. These records will show you how many owners the car has had, when it was last inspected, if it was ever classified as a "lemon," if it is a stolen car, or if it has ever gone through a major incident such as rolling over or being submerged in water. A good mechanic can spot many of these problems as well. A VIN check can also reveal if the car's odometer has ever been rolled back, or if it has flipped (reached the maximum miles on the gauge and rolled back over to zero).
VINs help deter car thieves, because they make it more difficult to resell the car. If someone checks the VIN, it will show that it the car was stolen, unless the thieves have altered it in some way. But it isn't especially difficult for car thieves to alter VINs. They frequently switch VINs, replacing the VIN in a stolen car with another car that they bought legally. Police use the VIN as a positive ID when looking for stolen cars, but thieves often cover up the dashboard VIN. An officer can't enter the car to see the door sill VIN plate without a search warrant.
VIN etching creates another level of protection. A weak acid application etches the VIN into the windshield and other windows of the car. This helps deter theft for several reasons. Thieves can't get rid of the etched VIN without replacing the windshield, which is so expensive that it can make stealing and reselling that car unprofitable. It's also much more difficult to cover up all the VIN etchings, so if a car is stolen, police can just read the etched VIN off of the window. Several companies sell kits that include a template with your vehicle's VIN and acid for about $20. Auto dealers and collision shops offer etching service as well, but it tends to cost more.
For lots more information on VINs and related subjects, check out the links on the next page.