Fret leveling is done to make sure that all of the strings play clean and it helps also to stop fret buzzing and helps to make sure that the strings are intonated as close to being true as possible.
These should help you to understand why it is important to have the frets leveled.ship
You kinda got to be careful with this one, in regards to buzzing? I had a guitar that I had buzzing on some of the higher register frets, and I had put Medium Strings on it. After taking to a pretty good local luthier for him to look at it, he noticed that it wasn't the frets at all, it just needed a shim in the saddle to raise the strings a little and all works fine now. Around here only a hand full of techs even deal with frets because they say it is very tedious and takes to long and don't want to fool with it.
A shim under the saddle, maybe he wasn't really that good of a luthier as a new made saddle would have been the best way to go, when you shim a saddle there is always going to be a slight gap between the two and that reduces the vibration to your top so you loose volume and some great sound and as for your techs well it must be pretty hard pickins if you can't find someone willing to do a fret dressing and leveling, that would be a fairly easy job for some one to do on most guitars.
As to when to get it done Micheal and Kody well thats kind of hard to say but you often see tell tale signs like fret buzzing or if you have a hydration problem with your guitars ( mostly because of too low humidity or even to high ) and the frets start to move a bit in their slots or you might have some frets with some noticable wear to them ( but then it is best to have those replaced ).Hope this answers your question if not I will try to find a builder to see if they can answer it better for you, but yes it does make the instrument play and sound better.ship