Insulin is a hormone in the body secreted from the Pancreas, and is known as the Master regulator of carbohydrate metabolism. It works in concert with its sister hormone, Glucagon, and a host of other hormones to regulate blood sugar levels in the body and protect from an excess of blood sugar (hyperglycemia) or too low a level of blood sugar (hypoglycemia).
It is mostly an anabolic hormone, meaning it acts to build molecules and tissues. It has some catabolic properties though (catabolis as in acting to destroy molecules and tissues to provide energy).
When active, insulin and the actions of the proteins under its control can be summed up with having two main actions:
Causing a flux of nutrients into the liver, fat, and muscle; to get said nutrients out of the blood
Causing a metabolic shift towards carbohydrates, favoring them as fuel, and thus minimizing usage of both fats and proteins for energy
It is increased in response to the diet. Most notably carbohydrates and the a lesser extent proteins. In contrast to many hormones, Insulin is one that is highly responsive to diet and lifestyle; manipulating insulin levels through one's diet and lifestyle is common in diet strategies.
It is essential to survival, and those who do not produce any or insufficient levels of insulin must inject it otherwise (Type I Diabetics).
Insulin has a phenomena known as 'Insulin Sensitivity' which can be summed up as 'The amount of action a single molecule of insulin can exert inside a cell'. The more insulin sensitivity you have, the less overall insulin you need to exert the same effect. A large scale and prolonged state of insulin insensitivity is what is known as Type II diabetes (among other co-morbidities).
Insulin is neither bad nor good from a health and body composition perspective. It has certain roles in the body and activating it may or may not be beneficial for particular individuals, but may also be wondrous for others. Typically sedentary obese persons would be wise to limit insulin secretion while power athletes or relatively lean athletic individuals would be wise to use carbohydrate timing strategies to maximize the effects of insulin.