The idea of them is so that you can plug a guitar into channel 18 (for instance) through the patch bay rather than having to reach around to the back of the mixer and making things very difficult. However, it gets better. Say I wanted to send a guitar out to a compressor or a reverb or any outboard things then what I would do is have the insert send of the channel going into the into the input of the outboard, then have the output of the outboard going into the insert return of the channel.
Here is a photo of my patch bay skills.
In the photo above was the patch bay from recording a drum kit, we had a mic on the kick drum, a mic on he snare, one for the hi tom, one for the low tom and 2 overhead mics.
Here is me looking extra groovy with my patch bay cables.