I was once a co-GM in an RP with a billion characters and players and was pretty helpful (I think) since the GM couldn't get on as frequently as a GM normally has to. While I didn't strictly 'do' anything, I was basically the real GM's prophet, interpreting his will and giving it as semi-official suggestions to players, especially those admitting sheets late, indicating whether they'd be likely to be accepted or whether their sheet might need revision.

On the whole, I think a co-GM is a situational role depending on the needs of the RP. Most RPs probably don't need them, but where the GM is otherwise occupied, or needs help bumping the story along, co-GM's do have their uses.