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Being your own agent is very important, and doing so can be highly effective in advancing your acting career. In fact, you should always aim to act as your own agent to some degree--even if you're at a point in your career when you don't need to.
Best Overall: William Morris Endeavor. Runner-Up, Best Overall: Creative Artists Agency. Best for Theater: Kazarian/Measures/Ruskin & Associates. Best for Background Roles: Central Casting. Best for Working Actors: Gersh. Best for Beginners: Boals, Winnett & Associates.
A talent agents finds jobs for the actors (or authors, athletes, musicians, models, etc.) they represent. More specifically, acting agents submit their clients for auditions, pitch them for roles, follow up on submissions and auditions, negotiate better pay and contracts, and renegotiate existing contracts.
Agents receive payment from production companies. They take their 10-20 percent commission, and then cut their actor a check for the remaining amount the actor has earned.