It's hard to imagine any employer that would hire a job candidate whose resume did not include at least a couple of references. The importance of a letter of reference cannot be overstated. It gives the interviewer a positive first impression of the interviewee, and demonstrates that the person is or was a valued employee in their last position.
A good letter of reference should outline the person's skills, qualifications and abilities, and should vouch for his/her character and integrity. It should not be overly long and whenever possible, it should be targeted for the type of position that the applicant is seeking.