If you clear the CMOS (or it "fails") what you do in effect is to reset the BIOS to the factory defaults. Bios stands for Basic Input Output System and as such holds all the data that is needed by your operating ststem to "understand" what it is that it is trying to operate.
For example, as well as the time, the Bios will tell the OS what Hard drives is installed, where it is installed etc. It will tell the OS what CD / DVD drives are there, the CPU speed the Memory Speed and the the various settings for all the bits and bobs attached to the PC.
So, all in all the Bios is fairly important and does a hell of a lot more than tell the time!!!