Agents allow you to serve reports to more concurrent users, and respond to higher report execution loads.
Using multiple report server instances that share a single report server database is called scale-out deployment. You can add Managed Agents to your deployment that the central controller server uses to automatically load-balance report execution tasks.
When you purchase the ActiveReports Server Edition, you can use as many agents as you need.
For optimal scalability, it is best practice to run agents on separate machines from the main host. But if your focus is on having less hardware to manage and keeping costs down, you can keep the agent on the same machine as the host.