CVS lets you access directly all the source archives. CVS is required if you are developing/modifying code for the project, or if you want to always get the latest development copy of Moodle. But even then, if you need the latest development copy, you can download it from the "latest nightly version" section without using CVS. In other words, CVS is not needed nor is a requirement to sucessfully run a Moodle site.
For a production server, you might want to rely on a stable release of the software, rather than have a development copy. The advantage of the development copy is that you get the latest features implemented in the project so far, but these might not always be as stable.