You do not, by any means, have to use max/min height/width. Only use it if it applies to your design or is necessary in order to maintain page structure. I don't think that it will work in IE6-7 but there are hacks, of course.
Here is an example of when you might use min-height:
Pretend you had a sidebar on your website that contains a list of events. Lets say that based off of your design the sidebar should be 500px high. So if you give the sidebar a set height of 500px (height: 500px) then it will always be 500px no matter how much content is in it. Lets pretend you start adding tons of events and before you know it there is no room in the 500px high sidebar, so you decide to make the sidebar adjust its height depending on the amount of content. So if you want the sidebar to adjust then you can no longer give the sidebar a set height of 500px (height: 500px). So lets say you take away the set height and all of a sudden have no events in the sidebar, that sidebar would be super small and you would want to use min-height to make sure it retains the 500px height.
So basically you would use it to control the height/width of an object when giving it a set height/width won't work.