Religion, shining armor, and so on and so forth.
The paladin is a holy warrior that can fulfill a variety of roles. They wear heavy plate armor, can wield a variety of weapons, and can cast heals and buff their allies. They don't make good main tanks in raid settings, but they can perform the role quite well in a small group that lacks a guardian or berserker. Furthermore, they can't heal as well as most priests or do as much damage as a mage or a scout. They shine in their ability to step up to help the party in different ways depending on what the situation calls for. Their unique buffs are also handy to have around, adding to the overall power of their group.
Paladins are not great soloers, but they can go through plenty of monsters without dying. Depending on what they're facing, they can choose between their offensive and defensive stance and cast continual warding and healing spells on themselves to keep them alive in the face of massive damage. Two handed weapons should be used when you're confident enough that you can chew through the monster before they finish you off, but otherwise it's best to run with a one handed weapon and shield. A paladin is most at home in a group, however.
When a paladin is doing damage, they should make the most use out of melee damage buffs that they possibly can, and gear appropriately to maximize their strength and intelligence. One trick to improve your overall damage is to cast an offensive spell in between each auto attack that you make. Do your best to avoid clipping your auto attacks with your casting, and you'll find that your damage can improve remarkably. Many of the paladin's attack spells restore the health and power of the group, making the paladin a great choice to improve the survivability of a group. They also have a number of strong area of effect abilities, and their heavy armor makes it a low risk activity for them to engage in.
Paladins can also be highly effective healers, competing well with other priests if they're properly geared. Their wards are their most powerful healing skill, as it prevents damage from coming into the tank. This synergizes well with other healers, as it makes their job far easier as it reduces spike damage, making instant tank death far less likely. They can fulfill this role at the endgame raiding level quite nicely, in addition to the others.