The Monkey fist is used as an end knot for a heaving line.
A heaving line is a line used for throwing from one location to another. This enables a larger line that could not be thrown over the distance to be pulled over.
The most common use of a heaving line is at sea, to pull a cable to shore from a ship. A cable is not easily thrown over a distance of 10m (approx. 33ft)or more, so instead one throws a heaving line.
That is what the monkey fist is/was originally used for. Now it is also used as fancy knot for key rings, necklaces and also for Monkey Fist Meteors.
The knot can be done with or without a central core (i.e. a round stone or ball bearing) to add extra weight but it is recommended to use extra loops depending on the size of the object.
For a visual representation of how to make a monkey fist go to http://www.realknots.com/knots/faqknot.htm