That’s Exposé. And it does more than what you just described:
http://docs.info.apple.com/article.html?artnum=304786
It makes Windows’ “Show Desktop” look like a pathetic broken toy. Amusingly, both VMWare Fusion and Parallels in “invisible” VM mode will let Windows apps become Exposé compatible.
Finally, let me just mention one reason why the Dock is better than Windows’ Task Bar - the dock resizes to accomodate all running apps. The Task Bar just adds more lines.
good point about the dock.