APT uses sources.list as a way to know where to get the packages from. So the more sources you have the more packages you get. If you did not have this file you would be left with a uses less program (like a car with no engine ) Debian sources will not work with Red Hat and Debian packages wont work with Debian.
Mandrake does not have a sources.list but rather a diffrent file Idon't know what it is.
Hope this answers you question.