It is used for call initiation, call teardown and other call related data sent during a VoIP conversation.
SIP is a text based application level protocol. It depends majorly on other protocols such as IP and UDP for transport. VoIP implementations with SIP mostly use a SIP proxy server to which the login credentials of users are authenticated. The proxy server also routes call and signaling data. Clients can establish a communication link between each and forward SIP messages via the proxy. Communications using SIP are also used for changing call parameters or other features such as integrating more callers into a conference session. SIP registrars are used as additional servers to locate other users.
VoIP technology is likely to be misused by criminals as it often does not require verification of any details to start using the service. The security of making such calls may also attract criminals, as many implementations use strong encryption to secure both the voice payload and control messages. Skype uses 256 bit AES encryption while Google Talk does not encrypt its payload (but will support encryption in the future).
As an example, an organized crime ring may decide to use Skype software that allows ring members to communicate anonymously. Criminals could use laptops running Skype, create profiles like a regular user and communicate when necessary.