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It has two main functions in a generator - firstly, it transfers the electrical energy from the (moving) armature coils to the (stationary) external electrical load circuit. The brushes are made of graphite, with a tiny trace of copper in it, so they're self-lubricating where they ruib on the copper commutator bars (those copper strips on the armature that the coil ends connect to).

Secondly, the electricity generated in the rotating armature coils is alternating current, and the brushes, working with the commutator acts like a switch to reverse the connections between the coil ends and the external circuit when the alternating voltage reverses its polarity (+ and -) to give direct current in the external circuit.

Have a look at http://community.myelectrical.com/wikis/myelectricalwiki/basic-generator-operation.aspx for more information.

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