When I press ctrl+alt+F1 it goes to virtual terminal. What is this virtual terminal for?
When do you need to use it?
Not all users need or run a graphical environment, and they will work from the virtual terminals.
Many (most) servers do not have a graphical environment as users are rarely logged in to the console. Servers most often require a command line from which the administrator can access the system to monitor or configure it. The virtual terminal provides this environment. Having more than one virtual terminal allows the administrator to switch to another terminal if necessary.
On a desktop with a broken Xserver (graphical environment) the virtual console provides a terminal session from which the Xserver can be reconfigured.
A Virtual Terminal is a full-screen terminal which doesn't run inside an X window (unlike the terminal window on your graphical desktop). Virtual terminals are found on all GNU/Linux systems, even on systems which don't have a desktop environment or graphical system installed.
Virtual terminals can be accessed on an Ubuntu system by pressing Ctrl+Alt+F1 till F6. To come back to the graphical session, press Ctrl+Alt+F7.
You can get more in-depth info about virtual terminals on its Wikipedia article.