You don't need one under all circumstances. Their main function back in the day was to correct the unstable analog video signal output by VCRs. Live cameras and digital video sources (DVD players, DV cameras) don't need them, for instance.
Although I think if you have more than one input source, regardless of whether it's digital or not, you do need one (or two?). That was never really clear to me, since the manuals all pre-date the digital formats.