Body, or shoulder roll is very important if freestyle swimming. You should feel as if you are rolling from one side to the other, a complete 180 degrees. It's important that your shoulders and hips roll together, otherwise you will tend to twist and sqirm. A couple things I have heard and use is to think about swimming in a pipe and to think about having a steel rod running through you. You wil rotate as if on a BBQ spit. A good drill it to swim/kick on one side, with one hand/arm extended, the other at your side, then the other, spending a few seconds on each side.

by rolling onto your side you're able to extend your hand/arm further to lenghten your stroke. I've heard it explained, if you want to go faster think about alternating pushing your hip down towards the bottom. This will speed the roll of your body and extension of your arm in the stoke. Just to be clear - pushing your right side hip down will extend your right arm and vice versa.

Stand facing a wall with your shoulders parallell to the wall. Reach up with either hand and see how high your fingertips can comfortably reach. Now roll your shoulders so you are at a 45 degree angle to the wall and reach up with the same amount of stretch (with the arm nearest the wall). You should notice a 5-6" increase in reach. Assuming 17 strokes per 25 yards, you are getting 204' more reach in a 600-yard swim, 510' more reach in a 1,500 yd. swim, 718' more reach in a 1.2 mile swim, and 1,436' more reach in a 2.4 mile swim. In other words, you need fewer strokes to cover the same distance. Also, you are saving your shoulders from impingement (where the rotator cuff gets pinched between bone) by rotating and reaching. I disagree with the previous post that your shoulders should roll 90 degrees, though. I believe 45 is more like it.

Just for the record, I said that it should FEEL like you are rolling 90 degrees. Since most people don't roll enough, it's better to exaggerate your roll and then find the optimum roll for yourself.

OK, then I agree that would be a good drill (exaggerated roll) to help develop the feel.

an important part of the reason to roll your body when swimming has to do with power generation. here is something to make it more real to you: go to a lat pull-down machine (the one that kind of replicates a pull-up motion) in a weight room. stand directly facing the machine (kneel if it's not high enough for you to extend your arms upward) and grasp the handle where it connects to the cable. see how much weight you can pull down with your arm moving down in front of you, extending all the way to the waist. now do the same thing, but with your body rotated a bit (45 degrees, maybe even a bit more) to the opposite direction of the arm doing the pulling (just like in swimming, if your right arm is pulling you have rotated to the left and vice versa). there is a big difference in how much you can pull because of the different muscles being used and the ways they are being used.
so, not only do you have more reach, as others have stated, but you also have more power during this extended stroke.

One of my coaches used to describe body roll as learning to think of yourself as a shish kebob on the grill. Everything rotated as you turned the stick, except your head (the cherry tomato) which stayed in its own place.

Probably the best way to get a feel for body roll is to swim a bunch of backstroke. That way, you can really figure out how to rotate and what it should feel like without being distracted because you're always having to move your head around to deal with breathing.