What is the tun network interface for?

I noticed when running ifconfig that there is a network interface called tun0 and it has an ipv4 address. A bit of research shows that it is a tunneling device, but I don't really know how it's used, what's using it, and why it has an IP address. I do have iptables enabled, and there seems to be some link between iptables and tun, if that helps.