I know I could use only a computer and create a workable design, but it's obviously restricting if too much time is spent looking into a monitor.
And there's something I find relaxing about sketching. Perhaps because I'm more relaxed I can think of ideas I wouldn't necessarily come up with when I'm pushing and pulling a mouse around my desk, obsessing over tiny details that aren't important in a project's early stages.
I enjoy drawing, and I do better work when it's enjoyable. So there's that, too.
Mark Hopkins said in one of the Voxpop answers, "[Sketching is] also a great tool for communicating with clients. It allows us to share an idea and talk it through at a purer, more conceptual level without getting bogged down in the detail or specifics inherent with a computer generated image."
I used to share a ton of sketches with clients. Terrible idea. But I've found it helps to show four or five solid ideas in sketch form along with a descriptive rationale, for exactly the reasons Mark mentioned. The client and I can then narrow the focus to two or three ideas and create more sketches or take those to the computer.
Read answers from other designers over on Design Week.